Retailer pricing pressures, heavy competition in a stagnant EU food and drink market, and falling margins have spurred many processors such as Atria to reorganise or sell off operations.
Atria said this week its subsidiary Liha ja Säilyke Oy, its logistics company F-Logistiikka Oy and Atria Oy will be integrated and reorganised.
"The integration improves the efficiency of the productive operations of Atria's meal and meat product industry, as the distribution of work in the Nurmo and Forssa production plants will become clearly defined," the company stated in a press release. "The reorganisation of operations provides an opportunity for Atria to develop its meal and meat product industries as a whole and, as a result, to be able to respond even better to changing customer and consumer requirements."
The company will transfer sausage production from its Forssa plant to Nurmo during 2007. The production of all-meat products, cold cut products and convenience foods will continue at the Forssa production plant. About 35 jobs will be cut at Forssa.
Operations related to logistics, technical running, financial administration and personnel management will be integrated into the meat processing subsidiary. Sales and marketing operations will be also integrated into operations.
Atria expects the integration to improve cost-efficiency by about €2m a year.
Atria said the integration will allow it to focus on developing its Forssan brand. The Forssan brand is the market leader in Finland for salad products. The brand also has a strong position in the cold cut product segment, Atria stated.
Liha ja Säilyke Oy was incorporated into the Atria Group in 1999. Liha ja Säilyke Oy manufactures salads, convenience foods, pasties and meat products. The subsidiary had a turnover of €41m in 2005.
Last week Atria reported that its April-to-June pre-tax profit was €5.2m, down from €9.4m the previous year. The company said its efficiency measures and price hikes in Finland had started to take effect and improve profits compared with a poor first-quarter performance.
The company's sales rose to €278m from €247m in the second quarter of last year.
"Due to the weak earnings early in the year, full-year earnings will remain below last year's level in Finland," Atria said in a statement.