Valio Ltd is rationalising its costs to correspond to the current operating environment. As part of its cost savings program, due to impacts on production and finance, the company will commence co-operation negotiations on 22 April 2015 in its Operations division and in some parts of head office operations.
The major changes undergone during the past year in its classes and volumes of production have had a significant impact on the profitability of Valio’s production structure, and this also has to be taken into account in the company’s business operations. The co-operation negotiations concern around 2,900 employees and it is estimated that at most the equivalent of 320 man-years in redundancies need to be achieved. The negotiations are expected to last six weeks.
Valio employs in total some 4,400 people, around 3,600 of whom work in Finland.
The cessation of exports to Russia has slashed Valio’s net sales by around a fifth. Meanwhile, consumer purchasing power has weakened in Finland and that has amplified the importance of price in buying decisions. Valio cannot compete in basic milks in its domestic market due to an interpretation of the country’s Competition Law, as a consequence of which the company’s market share of basic milks has fallen to less than 30%. In the global market, the recovery of prices is slow and uncertain.