Sardus restructures prepared-meat production in Sweden

Sardus Chark & Deli, a business unit in the listed Swedish food products group Sardus, is planning to move its production of ham products from Delikatess Skinkor AB in Hultsfred to Charkdelikatesser Produktion AB in Halmstad. The unit is also planning to move sausage production from the facility in Halmstad to Filos AB in Borås, partly to create space for the new ham production operations. The restructuring primarily affects the 31 employees at the plant in Hultsfred.

The background to the plans is that price competition has become tougher due to the emergence of several low-price players in the retail segment. Combined with higher raw material costs, this has increased the need to utilize the coordination gains that can be achieved within the Group. "By concentrating production to fewer units and coordinating our ham and sausage production to Charkdelikatesser Produktion and Filos, we estimate that we can save SEK 5-7 M per year over the long term," says Pelle Hjalmarsson, President of Sardus Chark & Deli. A relocation of sausage production from Halmstad to Filos would create four new job opportunities at the plant in Borås. As a result of the planned efficiency-enhancement measures, plans are also in progress to reduce the workforce at Pastejköket Produktion in Tranås by four people. Co-determination negotiations with trade union representatives will be initiated as soon as possible. Sardus Chark & Deli was established during spring 2005 through the merger of the Charkdelikatesser and Pastejköket business units. In conjunction with the formation of the new business unit, a reduction was made in sales and administration personnel, which will result in an annual saving of SEK 7-8 M. As a whole, the measures will lead to annual savings of around SEK 15 M. The Sardus Group's consolidated pretax earnings in 2004 amounted to about SEK 90 M. The Sardus Chark & Deli business unit has annual sales of approximately SEK 900 M, with some 380 employees. Helsingborg, August 15, 2005 AB Sardus (publ) Pelle Hjalmarsson, President, Sardus Chark & Deli Ragnar Bringert, President and CEO, Sardus Group For further information, contact: Pelle Hjalmarsson, +46 0 70 875 18 51, or Ragnar Bringert, +46 0 70 593 6273