Finnish food group Raisio has announced plans to restructure and streamline its agricultural arm, Raisioagro, with the loss of 43 jobs at the unit.

The company started employee negotiations at Raisioagro in April. As a result of the talks the production of pig and poultry feeds will cease. The company said it has "less opportunities for profitable business" now due to an increase in capacity in Finland and the development of a "slaughterhouse-driven" model for pork and poultry feed production.

Raisioagro has therefore decided to focus on its "core competencies" of cattle and fish feeds and plant cultivation.

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Raisioagro estimated that these staff reductions will result in annual savings of approximately EUR2.5m (US$3.4m) and the company will record some EUR10m in one-off costs, which are expected to focus on the third quarter of the year. Net working capital of about EUR11m will be released, Raisio added. 
Raisio is focusing its activities on cattle and fish feeds and on plant cultivation, which are the company's core competencies. Raisioagro aims to be the leading operator in the agricultural sectors where success is based on feeding and plant cultivation expertise and on innovations. Through expertise and innovations, Raisioagro improves its customers' possibilities to produce healthy food effectively while taking environmental issues and sustainable development into consideration as well as ensuring animal welfare.
Raisioagro's Managing Director Jarmo Puputti says: "In Ylivieska, Raisioagro has the most modern cattle feed factory in Finland and the cattle feed production in Kouvola will be enhanced through investments. Raisioagro provides its customers with optimised feeding concepts as well as feeds and farming supplies that meet their specific needs. Some dairy farms are already now testing our new feeding concepts particularly suitable for component feeding, and through Raisioagro's plant cultivation expertise, it is possible to also improve the quality of the farm's own silage. Raisio will continue to be a major Finnish grain buyer that purchases grain for its own use and to be resold both in Finland and abroad."
The employee cooperation negotiations, which started at Raisioagro in April 2014, have now ended. As a result of the negotiation process, the production of pig and poultry feeds will be stopped at the Raisio-based factory by the end of September 2014. In recent years, new capacity has been built in Finland for the production of pig and poultry feeds and the business model has become more slaughterhouse-driven. As a result, Raisioagro, as an independent operator, has now less opportunities for profitable business. Raisio's feed factory will continue to produce fish feeds and feed premixes. Fish feed production employs 15 persons, with the exception of midwinter when employees are laid off.
The cooperation negotiations resulted in the termination of 43 employments, of which 27 through redundancies. Some of the ending employments are temporary and some cuts are made through natural attrition. The redundancies concern all personnel groups. The negotiations concerned all Raisioagro's activities except the feed factory in Ylivieska and sales of fish feeds and feed export. Approximately 150 employees were in scope of the negotiations. The number of personnel reductions was lower than expected.
Raisioagro estimates that these staff reductions will result in annual savings of approximately 2.5 million euros. Associated with the cessation of the pig and poultry feed production, Raisioagro will record some 10 million euros in one-off costs, which are expected to focus on the third quarter of the year. Net working capital of about 11 million euros is estimated to be released compared to the situation at the beginning of the year.

Original source: Raisio