Russian and Asian markets next step for Raisio

By Alex McNally

- Last updated on GMT

Related tags: Profit, Marketing

Raisio remains determined to crack the Asian market in a bid to
turn the table on slipping sales in its ingredients arm, which fell
by some €4m in a year.

The Finnish firm reported an interim result today which has seen the ingredients division fall short of last year's €27m to €23.1m turnover between January and June. Exceptionally strong seasonal fluctuation in partners stocks and the decreased volumes in US and German markets were blamed for this shortfall. Raisio said its ingredients sales were also damaged by not being allowed to use health claims in its marketing in Turkey. It will now concentrate on breaking into the Asian market, where it says there is "major market potential." It has been a difficult time for the group, which shed nearly 90 jobs as part of a restructuring effort to save €9m last year. Its efforts to boost is profitably are far from over and the interim results not only came with renewed determination to break Asia, but to also boost its output in eastern Europe. However, while turnover was down for ingredients operating profit from April to June totalled €2.6m, up on 2006's €2.3m. The increase resulted from enhanced cost-effectiveness, the group said. Operating result in January to June totalled €5m, up from 2006's €4.1m. The company was pleased with its overall performance, which saw a general increase in turnover. In the six month period between January and June it was up €3m year on year to €204.4m. Chief executive Matti Rihko said: "Raisio's turnover and operating result improved in the second quarter compared to the early part of the year "Raisio will continue to implement rationalisation measures and adjust business to the prevailing market situation according to plans, the goal being to improve profitability.​" Second quarter turnover for food €48.5m was down €1m year-on-year, and feed and malt €53.6m up €3.3m. The fall in the food division was blamed partly on a contract to distribute products in Poland ending. Growth was seen in the soy oat and milling businesses, the Finnish margarine business and Russian operations. A series of measures have also been put in place to stem the company's "deteriorating" marketing position in Sweden. Raisio hopes the impact of these steps will be felt next year. It was good news for the cholesterol lowering Benecol margarine, which saw sales rise, the company said The Food Division's turnover in January to June totalled €98.3m, up from €96.9m. The company said it will increase its focus on the Russian market, where it hopes to improve its marketing and develop its distribution chain. Raisio has already made some dramatic steps this year alone to enhance operations and clarify its organisation structure. In February the company announced it would divest its food potato business, which was completed in June.

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