Atria Finland seeks growth in beef and poultry

In hindsight it is evident that a couple of years ago, when the decision was made to set up a large slaughterhouse at Kauhajoki, the deal with Saarioinen quite likely was practically ready.

Atria Finland will strengthen its already strong position in beef.  The report of Finnish Competition and Consumer Authority FCCA (in Finnish) makes quite clear that Saarioinen has been a significant vendor of fresh beef for instance in HoReCa sector. Kauhajoki slaughterhouse’s capacity utilization rate of course rises right away, but when the supply contract, which is included in the deal, ends after about five years or so, Atria is able to expand its own processed beef product lines significantly.  Naturally all this is subject to the condition that Saarioinen's farmers do not go to competitors' camps.

Poultry production should continue to strengthen significantly as well, but there are problems. The new starting company Huttulan Kukko may take its share of farmers. Another factor of uncertainty is the fact that the company Finnish Broiler, will not continue to distribute Ross Parent Stock but instead has started importing of Hubbard-bred stocks.  They need a longer growing period, which can cause a variety of changes and surprises throughout the production chain.  Whatever Atria Finland has decided to do, there must be some kind of changes.

Back to FCCA's report. It contains interesting data which tell that Atria Finland’s market share in cold cuts is only about 10 to 20 percent.  These products are known to be company’s core category, and there seems to be room for growth.  On the other hand, the official Meat Industry Report (in Finnish), released last autumn, tells for example that the consumption of cold cuts has been decreasing more than 30% compared to the peak year of 2007. Thus, in the short run, growth indeed can only come from increasing market share.

We will discuss Atria later but on Friday, March 28^th, we are going to look at HKScan’s businesses.  Poultry and beef - mighty relief?

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