Raisio outlines plans for growth

Related tags Baltic sea

Benecol maker Raisio will use profits from its recent chemicals
unit sale to embark on a new strategy designed to position it as a
leading producer of plant-based foods and ingredients.

The company, which has long disappointed with sales of its cholesterol-lowering plant sterols and the resulting debt, has sold off its most profitable unit, chemicals, giving it a fresh injection of funds to add new products to its food business and even look at 'moderate' acquisitions.

"Raisio is now well poised for a new start as a financially sound, listed company,"​ said CEO Rabbe Klemets.

An approximate €220 million operating profit from the divestment of Raisio Chemicals will go towards new technology to upgrade and develop existing products in the Nutrition unit as well as the creation of combination or entirely new functional food ingredients, particularly those designed to help manage cardiovascular diseases and diabetes, revealed the firm today.

Raisio Life Sciences is expected to grow organically by 15-20 per cent, said the company. The unit has seen an upturn in fortunes anyway recently, with the ingredients segment reporting growth of 60 per cent in the first quarter, based on a number of new product launches in past months.

The recently acquired food diagnostics business, which makes up around a fifth of the unit, is also set for substantial growth.

Raisio Nutrition is expected to reach an organic growth of 2 per cent in Finland and approximately 5 per cent in Russia and Poland in the next few years. More than €20 million will be invested annually on new technology and production in all three of these markets.

The food, feed and malt businesses are strongly focused on Finland, Poland, Russia and the Baltic States. Eastern Europe is seen as a strong opportunity for Raisio, based on its existing margarine production in Russia and geographical position, although its ingredients business needs to boost its Europe-wide presence.

Raisio is also hoping to improve efficiency, with return on capital employed targeted to increase to 12 per cent in the next couple of years.

This will be done by looking closer at synergies generated by its different businesses, "eliminating organisational overlaps, trimming loss-making business operations and products, and further developing logistics",​ said the firm.

A stronger balance sheet could also allow for acquisitions to support the new 'well-being' strategy.

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