HKScan Corporation Stock exchange release, 13 October 2014, at 8:45am
HKScan plans major production investments in western Finland and Rakvere, Estonia
In line with its strategic intent to boost profitable growth, HKScan is actively restructuring its production. The HKScan Board of Directors has given the permission to proceed with planning two major investment projects. The first is a prospective EUR 35-65 million facility in western Finland, and the other is a EUR 20 million production facility to be located in Rakvere, Estonia. The production facility will enable HKScan to develop its branded offering for growing segments, enhance its product quality, improve working conditions and safety, and reduce environmental impacts. The investment projects will also support HKScan in streamlining its production structure, integrating its technology and thereby improving operational efficiency.
Kariniemen’s success story to continue
Demand for pure, fresh, flavoursome, all-domestic poultry meat has grown at a steady pace of 2-4 per cent annually over the past few decades. This trend is expected to continue. Last year poultry meat consumption in Finland averaged nearly 20 kg per capita. HKScan’s Finnish poultry brand is Kariniemen. Kariniemen-brand products are produced at HKScan’s Eura facility, which is Finland’s largest production plant specializing in poultry.
HKScan has invested in the steadily expanding poultry segment both in Finland and its other markets. Last year HKScan opened a new poultry facility in Tabasalu, Estonia, which produces poultry products for the entire Baltic market. HKScan’s poultry brand in the Baltics is Tallegg. HKScan has additionally modernized its poultry plant in Vinderup, Denmark, where its poultry brand is Rose.
Chicken facility investment in western Finland
The final sum to be invested in the chicken facility in western Finland will be EUR 35-65 million depending on which option is chosen. HKScan will review whether to renovate and expand the existing Eura facility or whether to build a wholly new plant in a different location in western Finland.
The intent is to modernize HKScan’s chicken slaughtering, cutting and production processes. State-of-the-art technology will enable HKScan to develop new products for changing consumer preferences, as well as to significantly improve productivity and energy and material efficiency.
If the project proceeds, its will provide job security to most of the industrial personnel employed by HKScan in western Finland. It will also offer growth opportunities and guarantee the continuity of the entire west Finnish chicken value chain. In addition to jobs provided directly by the plant, the project will also have a significant indirect impact on local employment. There are numerous entrepreneurs in HKScan’s chicken production chain, such as hatcheries, freight forwarders, chicken breeders, feed suppliers and the fertilizer industry.
The planning stage is scheduled to run through summer 2015. During that time, HKScan will look in-depth into the two alternatives, clarify permit requirements and assess environmental impacts. For the investment to go ahead, the local infrastructure must offer a sustainable water and wastewater infrastructure. Before the final decision is made, HKScan will also clarify potential personnel impacts and any need for further investment in primary production.
New production facility in Rakvere, Estonia
The investment planned for Rakvere, Estonia amounts to roughly EUR 20 million. The final sum will depend on which option is chosen. HKScan provisionally plans to add a new 10 000 m2 y production facility alongside its existing plant in Rakvere. The new facility is to be equipped with advanced technology suited to producing value-added products for growing product segments. The planned investment is geared particularly toward developing the offering of the new Group brand, Flodins. The planning phase is scheduled to run through spring 2015. HKScan’s Rakvere unit currently comprises pork and beef slaughtering and cutting operations, meat processing facilities, and a logistics centre serving all of HKScan’s Estonian operations.
HKScan Corporation
Hannu Kottonen
CEO
For further information:
Hannu Kottonen, CEO, HKScan Group
Aki Laiho, COO, HKScan Group
Samuli Eskola, Executive Vice President, Consumer Business, Finland and Baltics, HKScan Group
Kindly submit a callback request via Marja Siltala, VP Communications, marja.siltala@hkscan.com, tel. +358 10 570 2290
HKScan is the leading Nordic meat expert. We sell, market and produce high-quality, responsibly-produced pork, beef, poultry and lamb products, processed meats and convenience foods under strong brand names. Our customers are the retail, food service, industrial and export sectors, and our home markets comprise Finland, Sweden, Denmark and the Baltics. We export to close to 50 countries. HKScan’s net sales total EUR 2.1 billion and we have some 7 700 employees, making us one of the Europe’s leading meat companies.
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