Raisio finishes cash-saving shake-up

By Alex McNally

- Last updated on GMT

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Raisio has finished the final round of this summer's
codetermination talks which will see a total of 54 job losses and
the closure of two mills to save some €4m.

The firm faced a €4m gap in turnover in this year's interim results and since set about trying to turn the tables. The news will help Raisio plug the turnover gap, but it remains to be seen whether this will penetrate into the long-term financial success of the company. 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. In wake of this year's cash black hole, two sets of talks began this summer. August talks specifically focused on boosting profitability in the ingredients arm of the business and finished on Monday. As a result 18 "white-collar"​ jobs and the reduction of nine jobs through "natural redundancy​" were agreed in a hope to 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 for much of this year. The food group, which specialises in plant-based nutrition, has mills for wheat, oats and rye at the plant, presently has a problem of over-capacity, and was in talks with the 70 workers employed at the site. Beginning in June, the talks focused on adjusting production at the site to match the current market situation. As a result, the wheat and rye mills will be closed down. The oat mill will continue to operate. The close-down of the two mills will cut a further 27 jobs and is thought to bring around a €2m saving. At the time Raisio published its results in August, the firm 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, but added that it will continue to implement "rationalisation measures"​ in a bid to make the firm more profitable.

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