Finnish meat processor HKFoods plans to close a local slaughterhouse in the town of Paimio as cattle numbers decline.
Operations conducted by the company’s Paimion Teurastamo business will be transferred to the “external service provider” Liha Hietanen in Sastamala from 31 March, HKFoods said in a statement.
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Following the transition, the Paimio-based production unit, which specialises in cattle and sow slaughtering, will be closed.
The decision is driven by “the decline in the number of cattle in Finland over the last few years”, the publicly-listed company said. It added that the number of dairy farms in the country “has fallen significantly”, and hence dairy cows coming in for slaughter.
HKFoods expects the downward trend in cattle numbers to continue, which has already affected its “cost competitiveness and operational efficiency”.
HKFoods CEO Juha Ruohola said: “At HKFoods, we want to strengthen the production potential of domestic beef by creating the conditions for continued production in the future.
“We also aim to improve the efficiency of the pork production chain in terms of sow slaughter.”
The Turku-headquartered company aims for annual savings of approximately €1m ($1.08m) from its efficiency drive, starting from the second quarter of 2025, with full realisation by 2026.
HKFoods said it is “building a stronger foundation for the future competitiveness of its business and improving profitability by streamlining its operations”.
The Paimio plant closure will impact 21 employees. HKFoods said it is working to provide employment opportunities within other company units.
“With this decision, we are safeguarding the cost-efficiency and competitiveness of our food chain and enabling Finnish food production to remain viable as international competition intensifies,” Ruohola said, adding: “Maintaining domestic food production in our own country is in the interest of all Finns. Our own food production creates food security through security of supply.”
Last year, the company known for its HK, Kariniemen, and Via brands in Finland, restructured its operations.
In October, HKFoods divested its operations in Denmark to Plukon Food Group and sold its Swedish business to Lantmännen in March.
For 2024, HKFoods reported a 7.4% increase in net sales from continuing operations to €1bn ($1.1bn) driven by “good consumer demand and successful commercial activities”.
The group’s EBIT from continuing operations was €22.4m, up from €14.3m in 2023.
The business continued to deliver a loss, which was €25.8m last year compared to a loss for the previous 12 months of €22.5m.
