A brief look at HKScan Plc in Sweden and Poland – Scan and Sokołów

Scan’s rapeseed oil pork in stores

Rapeseed oil pork is now in stores.  Scan, in collaboration with farmers on selected farms, has begun to add Swedish rapeseed oil in pig feed, resulting in more tender and flavoursome meat with a higher proportion of unsaturated fat and especially omega-3 fatty acids.  Scan estimates, that about 25 percent of their total sales of pork products in the Swedish market in the future will be rapeseed pork, estimate based on the situation in Finland, where the corresponding concept is already in full swing.  This new concept is seen as a good way to raise the profile of domestic pork production and pork use.  It is hoped to be the savior of the whole Swedish pig industry: farmers, Scan, consumers.  Even pigs are doing better. 

A win-win-win-win situation?  Healthier and taste wealthier?   The concept was piloted in high-class restaurants, and there was enthusiasm across the board. But the total demand will be decided quite soon, not by top chefs, but by those ordinary Swedish just wishing to prepare simple dishes or trying to choose a proper pack of sausage or meatballs.  Rapeseed oil pork may eventually displace the current normal pork and become a good alternative to beef and poultry, but it cannot replace inexpensive imported meat.  However, also Finnish experience suggests, that Scan’s rapeseed oil pork is more than just a fad.

Could Scan be for sale?

But if it does not sell, and if Swedish pork generally does not sell, perhaps the whole company Scan will be for sale.  In HKScan’s world, the acquisition of Scan by any company would be news of eight on Richter scale.  But Denis Mattsson, CEO of Scan, in Land Lantbruk’s interview on May, has something to say.  

After having calmly noted, that Scan is ready to use imported meat also in the products under their most valuable brand Scan, this earnest Finn, no forced smile, does not rule out ​​the sale of Scan.   “It is the owners to decide and nothing that I can comment.  What I can say, is that we assess all possibilities”.  The interviewer concludes Danish Crown (DC) to be an interested buyer. Mattsson is planning to retire at the end of the year, so should we even expect some kind of a grand final?

Coincidentally, we will now look at DC’s report “It’s all about food”.  We will look at it because of Sokołów, a Polish company owned jointly by DC (50%) and HKScan (50%). 

Sokołów’s network of shops, companys’s prospects and specialization

In the report, Sokołów’s brand is praised.  Indeed it is a precious brand, nobody doupts it, but there has been some concern about Sokołów’s network of own shops. However, the concept is being updated, and currently many of their outlets are of type shop-in-shop within supermarkets, Tesco and Kaufland for example.  Jerzy Majohrzak from Sokołów is convinced that the network of shops will stay and expand.  Earnings in own shops are higher that elsewhere, says Majohrzak in the report. 

In the short term, there are some problems not considered in DC’s report.  Price of pork in Poland has just reached a new record high, and there are no signs of turnaround, because pig farmers are still downsizing due to ever-rising feeding costs.  Also domestic demand for pork products is decreasing.

In the long term, Sokolow’s prospects seem to be just fine.  Certainly it is not for sale, on the contrary, Boguslaw Miszczuk, CEO Sokołów, is asked practically in every interview, if they soon will acquire some medium-sized or large Polish meat company.  Miszczuk’s answer is not absolutely negative.  Organic growth still is the main strategy, but Sokołów might be interested in financially sound, specialized Polish companies, said Miszczuk a year ago. 

Sokołów indeed is even built on specialization.  It has plants in seven locations around Poland, and many of them are highly specialized.  Clearly the company has created a working logistic system, still having room for new locations.  On the other hand, supermarkets are, according to Paweł Traczyk, Director, Sokolow Logistics, quite demanding.  They want the whole range of ordered goods preferably within a single delivery and with down-to-the-minute accuracy, Traczyk says.  Seems quite challenging but nonetheless, Sokołów’s products are available exceedingly widely in Polish supermarkets and grocery stores.

We will look at HKScan Plc again later but on Friday, September 28^th we are going to explore Atria Plc.  Summer is gone.  Law of nature.  Summer-time will continue.  Directive. 

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