The investment is expected to “significantly improve raw material yield, productivity and operational reliability and ensure the capacity required for strongly growing demand”. The project will be implemented in stages towards the end of 2020.
HKScan CEO Tero Hemmilä explained where the money will be spent. “We will renew the whole first part of the poultry unit’s production process in Rauma since the slaughter line introduced in 2017 does not meet the standards required by the Group’s current management.
“With the investment, the processing capacity of the slaughter line will increase by some 20 per cent and raw material yield by some 10%. The investment will also ensure a significant reduction in the consumption of utilities, such as water and district heating. Demand for poultry products continues to increase and the investment enables us to better meet this strong demand in the coming years.”
As part of the investment, the current slaughter line will be dismantled meaning HKScan will record a €6.9m write-down of the residual value of the current line balance sheet.
To ensure the stabilised service level during 2019, the new slaughter line will be installed in stages at the end of 2020. Hemmilä said demand and sales of HKScan’s poultry products in Finland have grown faster and stronger than expected and that this investment will enable business growth more assuredly in the years to come.
HKScan recently introduced a new operating model that split the business into separate units depending on region. This followed the implementation of a new financial strategy and cost-cutting measures.