Raisio streamlines business structure to cut costs

By Louise Prance

- Last updated on GMT

Raisio has stepped up its campaign to streamline the business
structure by cutting salary costs and decreasing the layers in the
Food Division.

Amidst struggles to stay profitable the Finnish firm has confirmed that, from today onwards, the food division's county managers will report directly to CEO Matti Rihko. Similar measures have previously been taken for the ingredients division, and today's news indicates this has yielded results. The move is expected to significantly improve the steering of the company due to the organisational restructure and reduction of salary costs. Denis Mattsson, former president of the food division, will leave the company of his own accord this year. No indication has been given of the level of costs the company hopes to achieve. A spokesperson for Raisio told FoodNavigator.com that more structural implementations were forecast for the near future, but declined to comment on what these where and when they would happen. The news comes during an unstable time for the company. The group's turnover from continuing operations was €436.3 m last year, the company's operating result from continuing operations, excluding one-off items, came to -€6.0 million (compared to €9.1 m in 2005). The operating result as reported in the financial statements came to €-38.5 million (-€10.9 million). Indeed, plant closures have taken place in order to try and hoist sales back up to previous levels. In June of this year the company announced discussions over the future of its grain mill in Nokia, Finland. The company confirmed there is presently a problem of over-capacity at the grain mill, and since Raisio has recently made deliveries to only a minimal amount of people it judges that the only way for the mills to continue turning is for the price increase for grain raw materials to be passed on to customers. A spokesperson for Raisio told FoodNavigator.com at the time that closure would be the "worst possibility".​ Seventy people are employed at the Nokia plant. The news that came just a day after it confirmed it was ceasing production of margarine at its plant in Istra, Russia from September, when it will transfer the operation to a subcontractor in an effort to reduce over-capacity and boost profitability. However, unlike the grain mill, the company does not foresee the closure of the plant - which will involve the loss of around 40 jobs - as a negative move for the margarine and flake business. CEO Matti Rihko said at the time: "We do not have a need for our own production capacity if it is not cost-effective… Raisio will continue to be one of Raisio's important market areas."​ Prior to this news Raisio completed the sale of its potato business in Russia to Profood Oy in an effort to streamline business operations and improve performance. When this sale was first announced in March Raisio said that while income from its food potato business had a minor, but positive, impact on the company's results, the company's overall target was to clarify the organisation structure and enhance operations.

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