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HKScan Reorganises Production in Sweden

05 March 2014

SWEDEN - As part of its strategic review in Sweden, leading Nordic meat producer HKScan Group is to improve its operational efficiency by further streamlining and developing its production structure in Sweden.

The planned actions will create a sustainable production platform in Sweden, supporting the Group’s strategic goal of boosting profitable growth.

The restructuring to be initiated in Sweden will centralise and enhance the Group’s Swedish production and technology footprint.

The plan targets an annualized profit improvement in excess of €7 million.

Scheduled for completion by the beginning of 2015, the restructuring will see an investment of approximately €0.6 million, and the entire roll-out will incur non-recurring costs of about €10.3 million. Of these non-recurring costs, €6.5 million are asset impairments.

The plan involves the discontinuation of pig slaughtering and cutting at the Skara facility, where production of meatballs, hamburgers and other convenience foods will continue.

In the future, pig slaughtering will be handled by HKScan’s own slaughterhouse located in Kristianstad and by its associated company Siljans Chark, located in Ickholmen.

Beef cutting will be moved to the Linköping facility. HKScan’s operations will additionally be supported by a contract slaughtering agreement with Skövde Slakteri.

As part of the restructuring, HKScan will relocate the production of skinless sausages from Örebro to Linköping and discontinue its operations in Örebro.

After the restructuring, HKScan’s production will be centralised and integrated at four key locations; in Kristianstad, Linköping, Halmstad and Skara.

"After a thorough strategic review and analysis of all relevant alternatives, we trust that these changes will ensure far better capacity utilisation, a competitive cost base and opportunities for profitable growth.

“HKScan is strongly committed to developing and investing in the Swedish meat business and value chain,” said Göran Holm EVP, Consumer Business Scandinavia.

Negotiations with personnel affected by the changes have been concluded.

The restructuring plan will involve a cut of about 140 jobs, mainly at the Örebro and Skara plants.

The headcount will grow at the Linköping and Kristianstad plants by approximately 50 people.

In line with its personnel policy, HKScan said it aims to offer as many impacted employees as possible new employment opportunities at other HKScan plants.

New vacancies at the partner company, Skövde Slakteri are being discussed.

HKScan currently has approximately 2,460 staff in Sweden.

HKScan said it is proactively investing in its competitiveness in order to secure the future availability of responsibly produced, high-quality Swedish meat raw material.

Last year, HKScan appointed specific producer collaboration teams specializing in pig, beef and lamb production, aiming to further develop and revitalise Swedish primary production.

The same cooperation model has already been applied earlier in Finland, and the best production practices are now being transferred to Sweden. The Group is also working to develop and renew its contract models, supplier steering, meat sourcing and producer services.

HKScan added that it is committed to continue investing in its Swedish consumer brands, offering and products with the aim of adding value throughout the entire meat value chain.

TheMeatSite News Desk

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