FINLAND: HKScan unveils Sweden streamlining plans
By Michelle Russell | 13 August 2012
- HKScan to streamline Sweden operations
- Part of restructuring plan announced in April
- 150 jobs may be lost
HKScan said the plans form part of a development programme launched in the spring
Finnish meat firm HKScan has announced plans to streamline its operations in Sweden in a bid to cut costs by EUR10m (US$12.3m) a year.
The group, which reported an operating loss from its Swedish business last week, said local subsidiaries, Scan and Pärsons, will be merged into one business unit to be called HKScan Sweden. They will, however, continue as separate brands.
In addition, the group will merge its commercial, production and logistics organisations in the country. This will involve the end of production at its Strövelstorp plant and the subsequent transfer of production to facilities located in Halmstad and Kristianstad. The moves will potentially lead to 150 jobs being cut.
In April, the company announced the launch of a two-year programme that aims to generate EUR20m in annual performance improvements. The company added that it would consider "long-term strategic alternatives" for its Swedish business, without providing further details.
HKScan said "removing current overlapping" would "clarify and speed up" its main processes and improve efficiencies.
As part of the plan, the company has promoted Magnus Lindholm to the role of director of operative activities in Sweden as of 1 September.
Denis Mattsson, executive vice president of HKScan's operations in Sweden and Denmark will retire at the end of 2012. Recruitment for a successor has started, the firm said.
HKScan to increase efficiency in Sweden
As part of the extensive development programme launched in the spring extending until the end of 2013, HKScan will further enhance the Group's business in Sweden. The plan now published aims to achieve an annual performance improvement of approximately EUR 10 million. The changes are planned to be implemented by the middle of 2013.
The structure of the business in Sweden will be clarified and streamlined in line with the Group's new operating model. The plan is that the wholly-owned subsidiaries belonging to the subgroup in Sweden will be merged into a single business entity to be known as HKScan Sweden.
Scan and Pärsons, which have previously operated as business units, will continue as brands in HKScan's business in Sweden. The aim is to continue to further develop the brands and the product offering, as well as raising the added-value of the products. The Scan brand is a market leader in the industry and one of the best-known consumer brands in Sweden. Pärsons brand is an industry leader in cold cuts.
In addition, HKScan will streamline the structure of production and revamp the organisation. When the plan is implemented HKScan's commercial, production and logistics organisations and other operations supporting the business in Sweden will be merged.
Regarding the actions previously announced, the aim is to employ the plan in order to transfer the production of semi-finished products from Strövelstorp to the production facilities located in Halmstad and Kristianstad, Sweden. The plan, when implemented, will mean the discontinuation of production operations at the Strövelstorp plant.
Negotiations concerning the plan with the employee representatives have been started in Sweden by initiating employer-employee negotiations. The implementation of the plan will mean a workforce reduction of approximately 100 white-collar employees and 50 blue-collar employees. HKScan has in average 2 800 employees in Sweden.
Implementation of the changes will entail investments of approximately EUR 1 million during 2013 and write-downs of some EUR 0.5 million. In addition, a number of other non-recurring costs will be incurred. The amount of these will become clear later on.
Strategic review and implementation of the development programme in Sweden will continue.
CHANGES IN HKSCAN'S ORGANISATION IN SWEDEN
Denis Mattsson, executive vice president of Sweden and Denmark and a member of HKScan's Management Team, will retire at the end of 2012. Recruitment of his successor has been started. During the latter part of the year Denis Mattsson will focus on strategic projects in the business in Sweden and on managing the repairs following the fire at the Vinderup plant in Denmark and on restarting operations there.
Magnus Lindholm has been appointed as director of operative activities in Sweden as of 1 September 2012. Mr Lindholm's main responsibility will be implementation of the development programme in Sweden. He is transferring to the position from within the company.
Hannu Kottonen CEO
Further information can be obtained from - Hannu Kottonen, CEO. Please leave any messages for him with Marjukka Hujanen on +358 10 570 6218. - Denis Mattson, executive vice president, Sweden and Denmark, tel: +358 400 432 877 or +46 76 128 36 98.
HKScan reshapes its strategy, the Group's management and operating model and organisation
HKScan has redefined its strategy. According to the new strategy, the Group will concentrate in particular on improving profitability by building up brand value and demand, by improving operational efficiency, by actively managing the dynamics of future business and by developing its capital structure and Group reporting.
As part of the strategy, HKScan will reform the Group's management and operating model in order to harmonise, simplify and enhance internal processes and cultures. The need for simplifying the structure occurred over the last few years as the Group has undergone a period of strong expansion and internationalisation.
By removing current overlapping, HKScan will clarify and speed up its main processes that are of key importance to customers and consumers. This will improve the efficiency of operations and make information more readily available for decision-making.
"It is of particular importance that HKScan continues to manage and secure the availability, quality and price of raw materials and other production factors required for customer deliveries in a responsible manner throughout the long value chain," says CEO Hannu Kottonen.
HARMONISATION OF BUSINESS OPERATIONS AND BUILDING UP GROUP FUNCTIONS
With the new Group-wide operating model, HKScan will reform and harmonise the Group's business operations based on customer segments and distribution channels. In addition, the Group will build up new Group functions for its current market areas. The company will also reform the Group reporting to better support the businesses, the new operating model, the organisation and Group management.
HKScan will introduce the operating model gradually by the end of 2013. The work for building up unified Group functions has already begun. The reform will not affect the Group's external reporting.
The businesses involved in the new operating model are responsible for sales and marketing, product development, in addition to the order-supply chain and production. They are: 1. Consumer, operating in the Group's main markets in Finland, the Baltics, Sweden and Denmark 2. Away from Home (AFH), looking after Business-to-Business (B2B), Food Service, industrial, export and import businesses on all HKScan markets 3. Sokolów and other joint ventures
The other Group functions supporting the businesses are: 1. Technology and Operations Development, a new function in the Group. It is responsible for raw material and other material purchases, quality processes, development of the order-supply chain and production technology, investments, IT systems and responsibility issues. 2. HR 3. Legal & Administration 4. Finance 5. Treasury 6. Communications 7. Strategy and Strategic Projects, another new function for the Group. It is responsible for strategy projects and continuous development projects as well as for refining the information that supports the business.
APPOINTMENTS IN THE MANAGEMENT OF HKSCAN GROUP
The following appointments have been made in the Management Team and other management of the HKScan Group in conjunction with the strategy update and change of operating model.
M.Sc.(Tech.) Aki Laiho (39) has been appointed Chief Operating Officer responsible for the development of HKScan's technology and production, deputy to the CEO and member of the management team. He has previously worked at the Aalto University, as an independent entrepreneur, at Sauer-Danfoss Aps and Nokia Corporation. Aki Laiho reports to CEO Hannu Kottonen.
M.Sc.(Econ.) Tuomo Valkonen (45) has been appointed Chief Financial Officer of HKScan and member of the management team. Tuomo Valkonem moves to his position from the post of CFO at CPS Color Group. Tuomo Valkonen has previously worked for Rautaruukki, Savcor, Kyrö and Metsäliitto. Tuomo Valkonen reports to CEO Hannu Kottonen.
The current CFO Irma Kiilunen will continue as Group Treasurer of HKScan, reporting to Hannu Kottonen.
M.Sc.(Econ.) Jukka Nikkinen (49) has been appointed Executive Vice President of the Away from Home Business and member of the management team. He joins HKScan from the position of Rautakirja Oy's director responsible for strategy and business development. Prior to that, in 2002-2004, he was the director of R-kiosk's international operations. Before Rautakirja, Nikkinen has held several positions in the Leaf Group during 1988-2001, as export and marketing director and other positions. Jukka Nikkinen reports to CEO Hannu Kottonen.
M.Sc.(Econ.) Samuli Eskola (38) has been appointed Senior Vice President responsible for HKScan's strategy and strategic projects. He moves to this position from within the HKScan organisation where he has held several managerial positions since 2007. Samuli Eskola reports to CEO Hannu Kottonen.
M.Sc.(Econ.) Pekka Kuokka (55) has been appointed Senior Vice President responsible for ICT at HKScan's Technology & Operations Development. Pekka Kuokka will also act as the Group's Purchasing Director (in addition to his main position) responsible for purchasing categories other than primary production and meat raw materials. He joins HKScan from the West-South European regional operations of Kone Corporation where he was responsible for business planning from the beginning of 2011. Prior to that, he worked for Kone Corporation in several international positions, responsible for the financial and IT functions of Kone Iberica and Giant Kone China. Pekka Kuokka reports to Aki Laiho.
FROM 1 SEPTEMBER 2012, THE MANAGEMENT TEAM OF HKSCAN WILL BE COMPRISED AS FOLLOWS:
Hannu Kottonen, CEO; Aki Laiho, COO; Tuomo Valkonen, CFO; Anne Mere (EVP), Executive vice president of Finland and the Baltics; Denis Mattsson, (EVP), Executive vice president of Sweden and Denmark; Jukka Nikkinen, EVP, Away from Home Business; Sirpa Laakso, EVP, HR; and Markku Suvanto, EVP, Legal & Administration, who also acts as the Secretary of the Management Team.
More detailed introductions of the Management Team Members will be available from 1 September 2012 at www.hkscan.com.
Original source: HKScan
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