Struggling Swedish Meats, Sweden's leading abattoir and meat group, is heading for a full-year loss of more than SKr250m after taxes, managing director Lars Wedén told owners gathered last week to vote on structural changes in the ownership structure of the cooperative meat group.

Wedén said the group will need record December sales if its August forecast of an operating loss of SKr150m will hold. December is usually a strong month for the Swedish meat industry as holiday sales set in, but this year's BSE scare in Europe has left its mark on the Swedish meat market as well with overall sales reported to be lower than normal.

When taking charge of Swedish Meats, Wedén introduced a major revamp to turn around the loss-making group, and by the end of next year the group will have shed 21% of its work-force to 4,400 employees. He forecasts a break-even for 2001 before one-time restructuring charges of SKr78m. Wedén assured the meeting he had made a conservative forecast for next year.

The group is in desperate need of improvement. This year it faces a negative cash flow for the second year running at SKr200m. This, in turn, will lead to higher borrowing costs and holding back on necessary investments, Mr Wedén warned.

Although experiencing setbacks in the market, the major problems Swedish Meats has to deal with lie within its own walls. Production inefficiency has been evident as the group has struggled to consolidate the merger of the three independent meat cooperative groups that now make up Swedish Meats.

In October, Swedish Meats picked Tulip International UK's managing director Peter Rasztar to lead the work to improve efficiency at its abattoir unit.