Sweden’s Spira said it would lay off 800 staff in a restructuring move
to turn the loss-making red meat and poultry meat group around. The move includes
closing two of its meat processing plants in Västerås and Malmö.
The cost-cutting programme aims to reduce the number of products and streamline
production. Managing director Per Nyqvist said the move was necessary to safeguard
the future of the group, which last year had a turnover of SKr4.2bn (US$391m).
Spira has been plagued with difficulties over the last four years and has accumulated
losses of nearly SKr800m. Last year it managed to reduce losses to SKr12m only
after a one-time spectacular finanical transaction involving two of the group’s
brand names with its main shareholder. Selling the brand names Kronfågel
and Goman to the Federation of Swedish Farmers (LRF), while
retaining the right to use them and with a binding option to buy them back at
a later date, the transaction gave Spira an extraordinary income of SKr160m.
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The group’s big headache lies in its red meat and pork operations within the
Samfood subsidiary. Fierce price competition, lack of clear marketing
focus and internal productivity problems have forced the group to constantly
scale down operations in order to adjust to lower volumes.
On a brighter note, after a couple of years of struggle the Scandinavian poultry
subsidiary is now back in the black, although operations will nevertheless be
reviewed under the current programme. It can, however, expect a steady growth
in poultry meat consumption in the wake of BSE and foot-and-mouth disease and
it forecast Swedish poultry meat consumption to soar 20% annually in the next
years. It also expects to boost its turkey production by 50% to 450,000 heads
this year.
By just-food.com in Stockholm
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