Raisio completes potato sale; supplies rapeseed oil for biofuel
to Profood Oy, the latest move aimed at streamlining its business
operations to improve financial performance.
The Finnish food group announced the plan to sell the Vihanti-based business to Profood in March. Raiso said at that time 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. "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 CEO Matti Rihko. "Raisio's main target for 2007 is to improve profitability." Raisio's food division experienced a 'deeply unprofitable' 2006, as the Finnish company struggled to cope with price increases and major restructuring. Although turnover from continuing operations increased slightly in 2006, amounting to €436.3 million, the company's operating result from continuing operations, excluding one-off items, came to -€6.0 million (2005: €9.1 million). Furthermore, operating result as reported in the financial statements came to €-38.5 million (-€10.9 million). The value of the transaction has not been states, but the business transferred to the new owner as of June 1. Profood said earlier this year that it plans to continue and develop production in Vihanti. The 50-strong personnel of the potato product plant will be employed by the new owner under the terms of their current employment contracts. The plant had a turnover of some €16 million in 2006. The plant uses annually nearly 50 million kilos of Finnish potato acquired from contract farmers. Meanwhile, in a separate announcement this week, Raisio announced that it has signed an agremetn with Neste Oil to supply rapeseed oil as a raw material for biodiesel. This autumn it will make delivery of 10,000 metric tones of oil, refined in Finland. At present oil processed by Raisio's oil milling business is used by the company's food and feed businesses, as well as sold to other food companies in Finland and exported. "New use for rapeseed oil refined in Finland also strengthens the future outlook of the domestic cultivation of oil plants. This enables Raisio's strong investments in developing contract farming and the chain of refining," said Rihko. Rihko said that the companies are in negotiations over co-operating on a multi-year basis.
