Finnish meat company HK Ruokatalo has vowed to close down two factories in a bid to cut down on annual costs.

The planned closures, within the next two years, will affect 500 workers at a processed meat factory, at Turku, along with the company's meat processing plant and distribution terminal, at Tampere.

HK Ruokatalo group managing director Kai Seikku said: "The planned action is being taken against a background of unsatisfactory competitiveness."

The planned closures are expected to result in annual cost savings of EUR15-20m, to be evident from the start of 2008. However, HK Ruokatalo, which currently employs 2,500 people in Finland, anticipates spending around EUR40-45m to transfer and deploy industrial production.

The company will focus most of its processed meat production on the Vantaa facility and processing of fresh meat on the Forssa factory, with logistics centred in Vantaa.

HK Ruokatalo currently employs 2,500 people in Finland but will be reducing its number of industrial places of business there from eight to six. It has recently invested in a new slaughtering line, refrigeration plant and cutting plant at Forssa and has expanded the distribution terminal at Vantaa - currently at the deployment stage.

The schedules for closure will be expanded on in talks with staff during the course of the spring. Discussions will then be held about the future need for labour, both on the blue-collar and clerical side, although the plan does not apply to finance, administration and sales staff in Turku, nor to employees of LSO Foods in Turku and Tampere.