Finnish meat processor HKFoods is set to close its local slaughterhouse in Paimio in response to a decline in cattle numbers. As a leading player in the food and beverage industry, this decision reflects broader trends impacting the meat sector.
From March 31, operations from the Paimion Teurastamo facility will transition to the external service provider Liha Hietanen in Sastamala, as stated by HKFoods. This strategic move will result in the closure of the Paimio production unit, which primarily focuses on cattle and sow slaughtering.
The decline in Finland’s cattle population, noted by HKFoods, has significantly affected the availability of dairy cows for slaughter. This trend is attributable to the substantial reduction in dairy farms across the nation. Consequently, HKFoods anticipates that the downward trajectory of cattle numbers will persist, negatively impacting its cost competitiveness and operational efficiency.
HKFoods CEO Juha Ruohola emphasized, “At HKFoods, we want to strengthen the production potential of domestic beef by creating the conditions for continued production in the future.” Furthermore, he stated, “We also aim to improve the efficiency of the pork production chain in terms of sow slaughter.”
The Turku-based company aims to achieve annual savings of approximately €1 million ($1.08 million) through improved operational efficiency, beginning in the second quarter of 2025 and fully realized by 2026. HKFoods is dedicated to establishing a robust foundation to enhance the future competitiveness of its business and boost profitability.
The closure of the Paimio facility will directly affect 21 employees. However, HKFoods is committed to assisting these individuals by providing opportunities within other company divisions. Ruohola underscored the importance of this decision, stating, “With this decision, we are safeguarding the cost-efficiency and competitiveness of our food chain and enabling Finnish food production to remain viable as international competition intensifies.” He added, “Maintaining domestic food production in our own country is in the interest of all Finns. Our own food production creates food security through security of supply.”
In a strategic shift, HKFoods restructured its operations last year. Notably, <ahref=”https://www.just-food.com/news/hkscan-to-sell-denmark-business-as-plukon-food-group-swoops-again/”>in October, the company divested its operations in Denmark to Plukon Food Group and, in March, sold its Swedish business to Lantmännen.
Looking ahead to 2024, HKFoods reported a 7.4% increase in net sales from continuing operations, reaching €1 billion ($1.1 billion), a result of positive consumer demand and effective commercial endeavors. The group’s EBIT from continuing operations also saw an increase, rising to €22.4 million from €14.3 million in 2023. However, the company continued to experience losses, reporting €25.8 million compared to a loss of €22.5 million the previous year.
This development within HKFoods reflects ongoing changes and challenges in the food and drink business, emphasizing the importance of adapting to food and drink consumer trends to maintain competitiveness in the evolving market landscape.
