Aug, 14 - The Lännen Tehtaat Group has decided on a new intra-Group ownership arrangement whereby Lännen Tehtaat plc will sell the entire share capital of its vegetable oils company, Mildola Oy, to its trading specialist in grains, oilseeds and feeding stuffs, Avena Nordic Grain Oy.
The aim of this is to combine the commodity market expertise of Avena Nordic Grain with Mildola's expertise in oil milling. The intention is to achieve annual synergy benefits of approximately EUR 0.5 million.
The new arrangement will be introduced in two stages. At the first stage, the administration, purchasing, sales and logistics functions of Mildola Oy will be transferred to Avena Nordic Grain Oy. This outsourcing of Mildola's functions will entail the transfer of nine of its employees to Avena. The second stage will be the asset deal taking place towards the end of the year, when Mildola Oy's vegetable oils business, excluding its oil milling operation, will be transferred to Avena Nordic Grain Oy, leaving Mildola Oy to continue its oil milling operation as a production unit of Avena. The new arrangement is expected to give rise to non-recurring costs of about EUR 0.1 million, which will be entered in the third-quarter result.
Since the vegetable oils business will no longer form a separate entity for monitoring purposes, the former Grain Trading and Vegetable Oils segments will, from the start of the third quarter, appear in the Group's financial reporting under a new segment name, Grains and Oilseeds. The operating segment data for the period Q1/2008 to Q2/2009 based on the new segment structure will be published today as a separate stock exhcange release.
The Grains and Oilseeds business will be the responsibility of Avena Nordic Grain Oy's Managing Director, Kaija Viljanen, who, as of 14 August 2009, will also be Managing Director of Mildola Oy.