Raisio to cut staff after 'unsatisfactory' performance

By Anthony Fletcher

- Last updated on GMT

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Raisio is set to implement further cost-saving measures following
the Finnish group's 'unsatisfactory' performance last year.

The company, which has already initiated some radical restructuring measures, said that this latest strategy would result in a permanent or temporary personnel reduction of around 65 employees and save 9 million in 2007.

"Growth has been slower than planned,"​ said the company in a statement.

"Streamlining of the group structure started in spring and will now be followed by reorganisation of the Food Division."

The turnover of the Food Division in 2005 was €210 million representing half of group turnover - and the division is still loss-making.

Taru Narvanmaa, executive vice president of communications for Raisio, told FoodNavigator that one of the main reasons for such slow growth has been incredibly intense competition in markets such as margarine. The company has also found it difficult to find a suitable market for its new soy and oat products, and sales have been limited to the domestic (Scandinavian) market.

As a result, Raisio is set to look at further cost-saving measures within the Food Divisions administration, sales and marketing and margarine business.

The Finnish group's turnover for the first quarter of 2006 was on a par with the prior year period (€99.3m compared to €98.1m), but operating profit was poor, slipping into the red from €4.1m last year to -€1.5 this year.

CEO Rabbe Klemets however said that he did not expect the entire year to be tarred with the same unprofitable brush. The company expects for full year 2006 the operating result to fall only slightly short of 2005, excluding one-off items.

Turnover in full year 2005 was €424.6 million and the recorded operating result, including one-off items, was -€10.9 million.

According to Klemets, Raisio's renewal is expected to stem from its emphasis on research and product development. R&D costs in Q1 amounted to €2.2m.

Narvanmaa said that the benefits of the most recent cost saving measures would probably start to be seen in 2007.

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