HKScan to invest US$6.62m in expanding poultry processing facility in Finland

FINLAND – Meat and food company, HKScan has unveiled plans of investing €6 million (US$6.62m) in the new slaughter process of its poultry unit in Rauma, Finland.

HKScan expects the investment to significantly improve raw material yield, productivity and operational reliability at the facility and ensure the capacity required for strongly growing demand.

HKScan’s CEO Tero Hemmilä explained; “We will renew the whole first part of the poultry unit’s production process in Rauma since the slaughter line introduced in 2017 does not meet the standards required by the Group’s current management.

“With the investment, the processing capacity of the slaughter line will increase by some 20 per cent and raw material yield by some 10 per cent.

“The investment will also ensure a significant reduction in the consumption of utilities, such as water and district heating.

“Demand for poultry products continues to increase and the investment enables us to better meet this strong demand in the coming years.”

With the investment, the current slaughter line will be dismantled resulting into a €6.9 million write-down of the residual value of the current line. However, the company said that the write-down has no impact on cash flow.

To ensure the stabilised service level during 2019, the new slaughter line will be installed in stages at the end of 2020.

HKScan said that the investment will improve operational reliability and productivity of the Rauma unit and significantly increase production capacity from the current levels.

“Demand and sales of HKScan’s poultry products in Finland have grown faster and stronger than expected.

“This investment will enable business growth more assuredly in the years to come. Demand and sales of Kariniemen poultry products, in particular, are expected to grow faster than the market,” the company said in a statement.

HKScan claims that strong profit improvement in its poultry business in Finland has been one of the key drivers of the group’s profit improvement in 2019.

This has helped the company to return to its market leader position in poultry category in Finland due to significantly improved service level.

HKScan introduce its new Group-wide operating model on 1 January, 2020 as an integral part of the company’s turnaround programme and its accountable implementation as well as the new strategy.

In line with its new operating model, HKScan is moving from a matrix organization to country-based Business Unit level P&L management where Finland, Sweden, the Baltics and Denmark form the reporting units.

The key Group-wide functions will continue to play an essential role in ensuring business synergies and good governance.

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