Sector News

Raisio to restructure its UK cereal business

October 12, 2015
Food & Drink

Raisio’s Snack & Cereal business targets growth in its key markets in Finland and the UK.

The UK’s Snack & Cereal business includes snack bars and breakfast cereals. In terms of the cereal business, achieving the growth target requires streamlining of cost structure, restructuring of operations to respond to the current operating environment and market conditions as well as product range meeting consumer needs. Raisio will enter into a consultation process in the UK concerning the employees and activities of the Southall site located near London.

In recent years, consumer behaviour and the demand for breakfast cereals have been changing in the UK. This has led to the decline of the entire cereal market and increased competition. Sales volume for Raisio’s cereals has decreased and profitability of the business has turned negative. With the reduced sales volume, fixed costs of the Southall site further restrict profitability improvements despite the efficiency improvements already carried out.

The consultation process in line with the British legislation concerns 99 employees at the Southall site. As alternatives, Raisio is considering a proposal to relocate or outsource the manufacturing currently based at Southall, whilst considering a possible site closure.

Tomi Järvenpää, Vice President of Raisio’s Snack & Cereal unit, says that a lot has been done with the current operational model to improve the profitability of the Southall site and to have cereal sales back on growth track. “To ensure future success, it is extremely important that we develop our activities so that our product range meets current and future consumer needs and that we maintain our competitive edge in local and international markets. Raisio’s strength is the ability to innovate delicious, healthier and ecological snacks.”

Source: Raisio

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