July 20, 2010

Finnish food companies collaborate on processed meat production

HKScan Finland Oy and Järvi-Suomen Portti cooperative have recently agreed to enter into a corporate arrangement to establish a new corporate entity to carry on the production of processed meats at Portti's current plant located in Tikkala in the town of Mikkeli.

The plant is to be made available to the new company, with Järvi-Suomen Portti as a minority shareholder, through a long-term lease.

The planned transaction includes the production machinery at the Tikkala plant as well as Järvi-Suomen Portti's brands. The new company will continue to sell and market Portti products.

The arrangement is being put into place to ensure continued production activities in Mikkeli as well as the availability of established and popular products to Finnish consumers.

Upon implementation of the arrangement, HKScan Finland intends to have the new company produce, on a contract manufacture basis, HK-brand products suited to the capacity and technology of the Mikkeli plant. When combined with the plant's own basic production, this will generate significant economies of scale for the new company.

HKScan is one of the leading food companies in Northern Europe. The company's home market consists of Finland, Sweden, the Baltics and Poland. Operating in nine countries, HKScan produces, sells and markets pork, beef and poultry meat, processed meats and convenience foods to retail, the Horeca sector, industry and export customers.