HKScan reveals plans for new poultry plant

By Michelle Perrett

- Last updated on GMT

The Finland unit will specialise in poultry production
The Finland unit will specialise in poultry production

Related tags: Baltic sea, Estonia, Poultry

HKScan, the European meat producer and processor, is planning to construct a new production unit in western Finland, set to open in 2017.

The unit would specialise in poultry products and would replace HKScan’s existing facility in Eura, Finland.

The €80m facility would be the largest single investment in HKScan’s recent history comprising a 25,000m2​ plant, infrastructure, production machinery, equipment and other related systems.

Production would continue uninterrupted at the existing Eura unit until the new plant is commissioned.

New products

HKScan’s management said it took the decision to recommend building an entirely new plant after comparing the costs and risks to modernise and expand the existing facility in Eura. The new plant would bring a significant increase in productivity and enable development of new products, it said.

The planned investment would entail a non-cash write-off of assets amounting to about €11m and would affect the production personnel of the current Eura plant.

HKScan Finland will initiate statutory negotiations with the production personnel of the Eura plant on 10 August 2015. It said that before taking a final decision on the investment project and its location it will conduct an investigation of its impact on personnel.

Improving efficiency

In addition, the group revised a plan to invest in expanding its production unit in Rakvere, Estonia and will instead focus on improving the production efficiency at the current plants.

HKScan Group’s also published its interim report for 1 January–30 June 2015 that revealed net sales were €940.8m and profit before taxes excluding non-recurring income and expenses was €-1.9m.

“HKScan’s performance continued to recover also in the second quarter of 2015. All market areas improved their comparable cash flow and also comparable EBIT improved, except in Denmark,” ​said Hannu Kottonen HKScan’s CEO.

'Lost volume'

“Our Danish business has lost volume including one major export customer.”

He said the overall business environment remained challenging due to ongoing political and economic uncertainties. He cited the Russian embargo and the price wars in retail as depressing the food and meat value chain.

HKScan’s home markets consist of Finland, Sweden, Denmark, the Baltic Countries and Poland.

Related topics: Meat

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