Jobs go as Raisio plugs cash gap

By Alex McNally

- Last updated on GMT

Related tags Raisio Profit

Raisio has announced a round of job losses in a bid to boost
profits in the wake of this summer's financial results, which saw a
shortfall in its ingredients arm by nearly €4m.

The Finnish firm's interim results showed a plunge in turnover, falling from €27m to €23.1m year-on-year.

As a result Raisio has now agreed to shed some 27 workers.

The last few years have proven difficult for Raisio, which shed nearly 90 jobs as part of a restructuring effort to save €9m last year, and its efforts to boost is profitably are far from over.

Today, Raisio said it will terminate "18 white-collar jobs and the reduction of nine jobs through natural redundancy, " which it hopes will bring on annual savings of €2m.

Raisio has been considering closing down its grain mill in Nokia, Finland, to raise profitability in the face of changing market conditions.

The food group, which specialises in plant-based nutrition, has mills for wheat, oats and rye at its Nokia plant, presently has a problem of over-capacity, and was in talks with the 70 workers employed at the site.

The company added that: " codetermination talks at the Nokia mill, which aim to adjust production to the current market situation, are ongoing ."

In August Raisio said it will also concentrate on cracking Asia with its ingredients, which it cites as having "major market potential."

Exceptionally strong seasonal fluctuation in partners stocks and the decreased volumes in US and German markets were blamed for the shortfall.

Raisio said its ingredients sales were also damaged by not being allowed to use health claims in its marketing in Turkey.

However, while interim turn-over 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. Overall company performance 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 then the company was pleased with the results.

He said: " Raisio will continue to implement rationalisation measures and adjust business to the prevailing market situation according to plans, the goal being to improve profitability. "

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