Finland’s HKScan to invest €12m in Polish bacon plant expansion

12-May-2016 - Last updated on 13-May-2016 at 13:41 GMT

HKScan is planning to modernise output capacity of its bacon plant

Finnish meat processor HKScan has unveiled plans to modernise and expand the output capacity of its bacon plant in Swinoujscie, in Poland’s north-western region. The investment is estimated to be worth some €12m, the company said in a statement.

Under the plan, the investment in Swinoujscie will raise the unit’s capacity, and allow the plant to be fitted out with the latest production technology. This is expected to enable the Finnish firm to add new products to its range, and improve the quality of its products.

Growing bacon segment

The project is “scheduled for completion by the end of 2017”, according to the meat processor.

HKScan said that its meat processing facility in Poland “is one of the group’s most technologically sophisticated units”. “The investment will enable HKScan to strengthen its position in the growing bacon segment and the high value-added product category, which are both among the group’s strategic focus areas.”

Swinoujscie is located less than 550km from the country’s capital Warsaw, on the Polish Baltic Sea shore.

The forthcoming investment will be carried out by the company’s local subsidiary HKScan Poland. The Polish facility was set up in 2004.

HKScan said it was a leading Nordic meat processor which specialised in making high-quality, responsibly-produced pork, beef, poultry and lamb products, processed meats and convenience foods. The company’s customers include various businesses active in the retail, food service, industrial and export sectors, and its home markets comprise Finland, Sweden, Denmark and the Baltic States. HKScan exports to close to 50 foreign markets.

In 2015, the Finnish company reported net sales of about €1.9bn. The company is operated by a workforce of some 7,400 employees, according to data released by HKScan. The company’s brand portfolio includes HK, Scan, Rakvere, Parons, Kariniemen, Rose, Klaipedos Maistas and Tallegg. HKScan’s subsidiaries are located in nine countries and operated by an aggregate workforce of close to 11,000 employees.

New investments

The latest announcement was accompanied by the released of the Finnish company’s financial results for the January-March 2016 period.

“Financially, the quarter was behind the corresponding quarter in 2015. Sales decreased and EBIT [earnings before interest and taxation] margin was unsatisfactory,” said Aki Laiho, HKScan’s deputy chief executive. “The most significant factors affecting the financial result were fierce price competition and oversupply of pork in Finland, as well as shortage of beef in Sweden, leading to high procurement prices and lower sales volumes.

“During the first quarter, we benefited from the sales and efficiency measures in the domestic markets in Denmark and the Baltics. Our cost-cutting programmes in all group companies could not fully compensate for the fall in EBIT margin.”

In its interim report for the first quarter of 2016, HKScan said its sales revenues totalled €439.1m in this period, and the meat processor posted a pre-tax loss of €7.3m.

In 2016 and 2017, the company aims to further invest in acquiring new technology and increasing its production capacity, Laiho said.