May 9, 2008

Finland's pork industry faces high costs, price disparity

Increasing feed prices, difficult market conditions, and cheaper products from Denmark and Germany challenge Finland's pork industry.

Atria and HK Scan, two leading pork companies in the country, have both reported cuts in profits despite growth in sales.

HK Scan's sales for Q1 2008 totalled EUR510.1 million compared with EUR498.6 million on-year.

The company's earnings before interest and taxes (EBIT) for Finland, however, went down to EUR4.1 million compared with EUR7.3 million last year.

In the Baltic region, EBIT was only EUR1.4 million compared with EUR2.5 million last year. This was due to losses in the red meat business, said HK Scan.

Atria's group net sales increased by 9.9 percent to EUR303.4 million compared with EUR276 million in 2007, but EBIT was down to EUR6.8 million from EUR11.5 million.

According to the company, the high cost of raw materials across the food chain has slowed the Group's performance.

The imbalance in the price of pork between Finland and the rest of Europe also affected the company's profitability.

US$1=EUR0.65, as of May 9