March, 9, 2009 - For reasons of production and the economy, Raisio is initiating mandatory codetermination talks in order to adapt vegetable oil production to the market situation.
The effects of the economic crisis can be seen in the oil milling business as a weakening of demand for rapeseed oil and its resultant a weakening in profitability. Raisio is initiating the talks with the aim of laying off the entire staff at its oil milling plant for a maximum of 90 days. The talks concern 31 people.
The indirect effects of the global financial crisis can be seen also as a fall in vegetable oil price and a weakening of export possibilities. One significant reason is the reduction in the manufacture of biodiesel as a result of the low crude oil price and the economic downturn. The price of vegetable oil in global markets has decreased by almost one half during the past six months. The weakening in demand can be seen as a bloating of stocks and a weakening in profitability. The profitability of the Finnish oil milling industry is also being weakened by the scant availability of domestic raw materials and the necessity of resorting to the use of imported seed.
Of the products at its oil milling plant, Raisio is utilising meals in its feed production, but only one quarter of the oil is being used as a raw material in the company’s own food chain production. Most of the oil being manufactured is being sold on international markets.
Adapting vegetable oil production to the market situation is Raisio’s way of controlling the pressures on the profitability of feed raw material. The company is ensuring that it maintains its profitability and is reacting to changes in demand by adapting its operations.