Raisio drops Russian potato business
"Along with the new owner the food potato business has good opportunities to develop as a strong specialist in the field," said Raisio's CEO Matti Rihko. "The sale of the food potato business is one step in streamlining and clarifying Raisio's business operations." Indeed, the Finnish firm earlier statement that the divestment was in line with the company's targets. The company said that while income from its food potato business has a minor, but positive, impact on the company's results, the company's overall target was to clarify the organisation structure and enhance operations. "Raisio has taken the first steps in focusing its business portfolio with decisions concerning diagnostics and potato businesses but the streamlining of the company will continue," said Rihko. "Raisio's main target for 2007 is to improve profitability." The operation in Vihanti will be sold to Profood Oy owned by Pohjoisen Kantaperuna, Potwell and Markku Tuuli. A preliminary agreement on selling the food potato business was executed in February 2007. Following yesterday's agreement, the transaction is likely to be completed by the end of June. The buyer has announced it will continue and develop production in Vihanti. The personnel of the potato product plant will be employed by the new owner under the terms of their current employment contracts. In November, Raisio reported a set of Q3 results that showed the company's operating result back in the black. The Finnish group's turnover for the quarter was on a par with the prior year period (€113.8m compared to €110.7m) - but the operating profit slipped from €3.8m last year to €2.1 this year. The company's decision to execute a preliminary agreement on selling the Vihanti operation is therefore part of a larger restructuring effort in order to improve performance and rationalise operations. Such initiatives are targeted at annual cost savings of €9m, the firm said in November. The Vihanti-based potato product plant had a turnover of some €16 million in 2006 and employs approximately 50 people. The plant uses annually nearly 50 million kilos of Finnish potato acquired from contract farmers. Raisio is a specialist in plant-based nutrition, with production in six countries and products sold in some 30 countries. Turnover in 2006 was some €436 million.