HKScan - it's now Nordic everywhere

Nordic knowhow, leading Nordic meat expert, Nordic house of brands, pride in Nordic roots - that’s what the Group and its new home pages tell.

Hannu Kottonen CEO HKScan Group, comments Sokołów sale:

 

 “The deal is positive for all parties.”

Evidently, HKScan couldn’t afford to continue now when Sokołów is going to make significant investments. 

Kottonen continues:

“We continue building HKScan as one strong Nordic Group focusing on branded meat business. The deal resulting in strong balance sheet and lower net financial costs will improve our prerequisites for speeding-up the strategic work to invest in our strong brand offering as well as on related production facilities and technologies.” 

Time will tell what kind of truly strategic investments there will be.  Rather it seems that the Group’s restructurings have been some kind of operational cost savings projects.  

The Group has now some money to spend. Fortunately it is not wasted instantly: The Board of Directors proposes to the Annual General Meeting that a dividend of only €0.10 be paid for each share.

Now the Group does not invest in enlargement but on the contrary in downsizing. The great and mighty Scan gives up but others continue to prosper.

Newspaper Lantbruk tells about these matters extensively.  The plant in Örebro is closed and in Skara the slaughtering is discontinued and partly moved to Kristianstad, partly outsourced to a nearby Skövde slaughterhouse, a large family company.  Skara's capacity utilization rate was only 40% but on the other hand, in Kristianstad it will rise only to 70%.

Göran Holm, EVP Consumer Business HKScan Scandinavia, justifies the actions something like this:

We have analyzed an incredible number of options before we came to this. It would have become more expensive to close in Kristianstad than in Skara.

That sort of a strategy!   

And what about this? The above mentioned newspaper tells also that Göran Holm revealed that Scan will in the future allow certified GM soy in the feed, which according to Swedish Pig Entrepreneurs can lower the production cost by €6 to €7 per pig. 

My question is if moving to GM feed is company's strategy or only cost savings again?  It may prove to be a monumentally bad mistake.

But what about the Baltic? 

HKScan’s turnover in the Baltic has remained at about €175 million level for some time.  In Estonia, HKScan is the unchallenged number one, no doubt.  About the same holds for Latvia, where Rīgas Miesnieks is the market leader, turnover about €35 million.  In Lithuania, however, Klaipėdos Maistas with its perhaps 10% to 20% market share and turnover about €15 to €30, is probably not quite what the company is hoping for. Lithuania after all is the largest economy in the Baltic. So, let’s make a guess:  Next major investments after Sweden will be made in Lithuania. 

We will discuss HKScan later but on Friday, April 11^th, we are going to look at Atria’s businesses.  Nordic static - Baltic dynamic.

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