Raisio said the transfer of its cattle feed business to the new owner is likely to take place in September 2018. That deal is subject to approval by the local competition authorities.
The divestment is informed by the Finnish company’s strategy to focus on “healthy foods and profitable growth”
In December 2017, the company sold off its confectionery business; Irish group, Valeo Foods, acquired the entirety of that division, including plants in the UK and the Czech Republic, for €100m (US$120). And in January 2018, Raisio let the market know it was considering a sale of its cattle and fish feed businesses. It said then that it had initiated negotiations with several players in that regard.
“To ensure Raisio’s organic growth, we are going to move from a holding-type structure to a model in which all resources are targeted toward supporting the strategic objectives of the Healthy Food Division. Raisio also seeks growth through acquisitions that suit our core business,” said Pekka Kuusniemi, CEO of the Raisio group, at the time.
Today, however, it said it would retain its fish feed business, Raisioaqua, and the associated personnel.
"Consumer need for farmed fish is growing year-on-year globally, and in Finland and neighboring countries. After strategic consideration, Raisio decided to keep the fish feed business and not to sell it. The business is in good shape, the company has invested in it and will continue to develop it further," a spokesperson for Raisio told FeedNavigator.
Cattle feed sale
The divested cattle feed business includes two production plants in Ylivieska and Kouvola, as well as the brands, of which Maituri and Melli are the best-known. Raisioagro’s Benemilk licence will be also transferred to the buyer. The company said the 76 employees of that segment will be transferred to Lantmännen Agro.
Net sales for Raisio's cattle feed operations in 2017 totaled €73.8m, earnings before interest and tax (EBIT) for the segment reached €1.9m while it recorded earnings before interest, tax, depreciation and amortization (EBITDA) of €3.7m.
CEO of the Lantmännen Group, Per Olof Nyman, said the acquisition of Raisio’s cattle feed business will strengthen its position in the grain value chain in the Baltic Sea area.
“We already have large holdings in the bread and malting industry plus independent distributors all over Finland through Lantmännen Agro Oy. We are pleased to acquire Raisio’s well-established cattle feed business, since its operations fit well with our business and with the Lantmännen vision, making us a more versatile business partner for Finnish farmers.”
Raisio said, post divestment, it would continue to deliver grains for feeds to Lantmännen Agro.
Workforce reduction
Raisio also announced that Perttu Eerola’s duties as vice-president of the Raisioagro Division, group management team member and Raisioagro Ltd’s managing director will cease, as of today.
In addition, the Finnish company said it has concluded negotiations on staff reduction - 20 employees were let go in March and a further 22 staff members are set to have their employment terminated.
“The workforce reductions resulting from the negotiations are carried out through retirements, voluntary arrangements and redundancies, and partly through the termination of fixed-term employment contracts.”