RAISIO DIVEST ITS FOOD POTATO BUSINESS AND NEGOTIATE ON A WITHDRAWAL FROM THE
Raisio plc Stock Exchange Release 7.2.2007 at 9.40 a.m. Finnish time
RAISIO DIVEST ITS FOOD POTATO BUSINESS AND NEGOTIATE ON A WITHDRAWAL FROM THE
RUSSIAN FLAKE MILL PROJECT
Raisio has executed a preliminary agreement on selling its food potato business
in Vihanti to a newly established company owned by Pohjoisen Kantaperuna Ltd,
Potwell Ltd and Markku Tuuli. The transaction is to be completed in the first
half of 2007. The buyer has announced it will continue production in Vihanti.
The Vihanti-based potato product plant had a turnover of some EUR 16 million in
2006 and employs approximately 50 people. The plant uses annually nearly 50
million kilograms of Finnish potato acquired from contract farmers.
The income from Raisio's food potato business has a minor, but positive, impact
on the company's result. Raisio's target is to clarify the organisation structure
and enhance operations. This deal is in line with the company's targets.
As a result of assessment of foreign investment projects started in December
2006, Raisio has initiated negotiations on a withdrawal from a currently planned
project concerning the construction of a flake mill in Burunduk, Russia. The
decision is based on a considerable increase in investment costs, which is
expected to result in the project no longer meeting the original revenue
requirements.
To cover the probable risks related to changes made to the project agreements,
the company will include a write-down of approximately EUR 5.8 million in the
financial statements for 2006.
Raisio will continue to sell and market flake products in Russia.
According to Raisio's CEO Matti Rihko: "The evaluation of solidity of assets and
investment projects initiated by the new management in December 2006 is now
completed by these measures. Raisio has taken the first steps in focusing its
business portfolio with decisions concerning diagnostics and potato businesses
but the streamlining of the company will continue. Raisio's main target for 2007
is to improve profitability."
RAISIO PLC
Heidi Hirvonen
Communications Manager
Further information:
CEO Matti Rihko, tel. +358 2 443 2716 or +358 400 830 727
Distribution:
Helsinki Stock Exchange
Key media
www.raisio.com