Finland’s Fazer Group is mulling over the future of its dairy business, potentially putting jobs on the line at a factory in the south-east of the country.

The Koria facility operated by the company’s Lifestyle Foods division employs 226 people. Some 95 permanent positions are expected to be lost if the group goes ahead with the plan to discontinue its presence in dairy. Production at the plant will be focused on oat drinks and oat-based products, what Fazer terms as its core business centred on a plant-based strategy.

Fazer Group, which also has confectionery and bakery arms, said it has spent EUR300m (US$317.2m) on its oat product operations in the past three years to serve its home markets in the Nordic countries.

The company said it is a “small player” in the Finnish dairy industry mainly manufacturing private-label goods. “Due to the low volumes and high complexity in a category driven by scale, being competitive is very challenging for Fazer,” it said in a statement.

Kati Rajala, the vice president of Fazer Group’s non-dairy and dairy business, added: “With our small scale in dairy production, we are uncompetitive and have been challenged even more in the recent inflationary environment. Improving [the] efficiency of our Koria operations is inevitable to secure our competitiveness.”

Fazer Group said it is in negotiations with the workers that could lose their jobs, with the discontinuation of the dairy business slated for August this year if the plans materialise.

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By GlobalData

The Koria factory, inherited through the 2019 acquisition of Kaslink, produces the Aito brand of oat drinks and oat-based snacks and cooking products such as flours and mixes.

Fazer Lifestyle Foods employs around 550 staff and generated sales in 2021 of EUR180m. The group as a whole posted sales of EUR1.14bn in that financial year, an increase of 4%.

Comparable EBITDA was up 2% at EUR127.8m. However, net profit dropped 93% to EUR32m.