The Royal Greenland Group, Greenland's biggest company, will most likely make a loss in 2001, despite that they had budgeted for a profit of DKR50m (US$6.16m).

MD Keld Askær, who was appointed on 1 October, is now preparing for a cost-cutting drive at the fishery, by cutting out unprofitable activities.

This will involve closing a factory in Maniitsoq city and pulling out of a number of unprofitable environmental investments.

"Royal Greenland has previously tried to keep every factory open at any price. But that cannot work in the long run. Our point is that money can be saved all round. But we will also invest in those places where we can make a profit," Askær told Danish newspaper Berlingske Tidende.

Royal Greenland will be adversely affected by write-offs of DKR22m as a result of the closure. The budget for 2001 was originally to make a profit of DKR50m before tax. Last year the group made modest pre-tax profits of DKR3.5m.

"We will have better liquidity," said Askær: "But we cannot rule out that we will make a loss after the extraordinary write-offs."

Financial results will also be hit by lower earnings this year. The sales price of prawns on the world market has reduced drastically.

By Penny Leese, just-food.com correspondent