HKScan Oyj - Company Announcement

HKSCAN GROUP PLANS NEW STRUCTURAL CHANGES IN FINLAND AND SWEDEN

HKScan Corporation     STOCK EXCHANGE RELEASE    15 September 2010 at 9.30am


HKSCAN GROUP PLANS NEW STRUCTURAL CHANGES IN FINLAND AND SWEDEN

Plans are being made to further improve the efficiency of the structures of
HKScan's Finnish subsidiary, HKScan Finland, and of the Swedish subsidiary,
Scan AB, during the period 2011−2013. HKScan's new intra-Group action plans aim
to deliver development benefits of EUR 12.5 million in Finland by the end of
2011 and the EUR 30 million in Sweden announced last year. 

The plans are designed to improve HKScan's profitability. The plans currently
envisioned to be implemented also aim to secure the product offerings, quality
and responsible operations required by customers and consumers throughout
HKScan's entire business chain. The foundation for future growth and
profitability will thus also be strengthened. 


IN FINLAND, PROGRESS IN PLAN TO DEVELOP BUSINESS CHAIN

The specifics of HKScan Finland's business development plans announced in April
have been worked out. The planned programme seeks to strengthen the company's
position in the home market in Finland and to deliver development benefits of
EUR 12.5 million by the end of 2011. 

The planned programme aims to achieve better cost competitiveness at HK
Ruokatalo's production facilities and to develop the quality required by
customers, delivery reliability and the technology entailed by product
concepts, without costly investments. 

The programme tentatively plans greater centralisation of production
activities. As a result it would be possible to achieve the cost
competitiveness required for success in the market. According to the plan, pork
slaughtering and cutting would be centralised in Forssa, beef slaughtering and
cutting in Outokumpu and the production of processed meat products and
convenience foods in the Group's production facilities. If the plan is
implemented, pork slaughtering and cutting would be transferred from Mellilä to
Forssa and the production of processed meat products and convenient foods from
Säkylä to the Group's other production facilities. 

In addition, HKScan Finland will continue to assess the need and role of
subcontractors in each business area. 

Implementation of potential centralisation would − to significantly improve
work productivity − require cooperation from the employees, a new corporate
culture and adaptation to a new competition environment, especially at the
company's largest production facilities in Forssa, Eura and Vantaa.
Negotiations on the plan will be started in the near future with
representatives of HK Ruokatalo's personnel. 

Implementation of the planned programme would mean a reduction of roughly 250
person-years throughout HKScan Finland's entire business chain, including
subcontractors / outsourced operations, by the end of 2011. 

The investments relating to the programme are included in the normal annual
investment programmes of HKScan Finland's business, and are estimated to give
rise to additional expenditure of EUR 3 million in the years 2010−2011. 


INDUSTRIAL RESTRUCTURING PROGRAMME IN SWEDEN TO EXPAND

Plans are being made to expand the restructuring programme initiated in
HKScan's Swedish market a year ago to secure the programme's development
benefits of EUR 30 million. 

According to the plan, the production of food sausages would be centralised
during the period 2011−1013 mainly in Lingköping. This means that that the
frankfurter lines in the Örebro production facility and the sausage production
in Kristianstad would be transferred to Lingköping. In addition, the aim is to
transfer the production in Ströveltorp of semi-finished products sold under the
Pärsons-brand to Scan's other production facilities. A solution for a shared
model of operation will be sought from the Skara production facility during
2011. 

In addition, the head office and administrative functions are to be transferred
from Skara and Stockholm to Linköping. After the transfer, sales and direct
support services linked to them would remain in Stockholm. If it goes through,
the plan will mean that Linköping's position will be stronger. 

Negotiations aimed at implementing the plan have been started with the labour
market parties. Upon implementation, the plan involve, as announced a year ago,
a reduction in Scan's employees from the current number to approximately 2,500.
Any staffing arrangements would affect mainly Örebro, Kristianstad, Skara,
Strövelstorp and Stockholm. 

The investments relating to the programme are included mainly in the normal
annual investment programmes of Scan AB's business, and are estimated to give
rise to additional expenditure of EUR 4 million in the years 2010−2011. 


HKScan Corporation


Matti Perkonoja
CEO


Further information is available from:
- HKScan's CEO Matti Perkonoja. Please leave any messages for him to call with
Marjukka Hujanen on +358 10 570 6218. 
- HKScan Finland's Managing DirectorJari Leija. Please leave any messages for
him to call back with Marja Säkö on +358 10 570 2602. 
- Scan AB's Managing Director Denis Mattson. Please leave any messages for him
to call back with Marjukka Hujanen on +358 10 570 6218. 



HKScan is one of the leading food companies in northern Europe with home
markets in Finland, Sweden, the Baltic countries and Poland. HKScan
manufactures, sells and markets pork and beef, poultry products, processed
meats and convenience foods under several well-known local brand names. Its
customers are retail, the HoReCa sector, industry and export customers. HKScan
is active in nine countries and has some 10,000 employees. It had net sales of
2.1 billion euro in 2009. 


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