Rakvere meat plant sees profits soar, set to expand production

  • 2006-08-09
  • From wire reports

NOW HIRING: Rakvere officials warn that wage pressures will soon take the competitiveness out of Estonian meat.

TALLINN - Rakvere Lihakombinaat (Rakvere Meat Factory), the Baltics' largest meat processor with production facilities in all three countries, announced this week that first-half 2006 earnings totaled 81.3 million kroons (5.2 million euros), up 72 percent year-on-year. The group's six-month turnover totaled 802.9 million kroons, an increase of nearly 13 percent year-on-year. Out of that, 511 million kroons came on the Estonian market, 152 million kroons from Latvia, 92 million from Lithuania and 48 million kroons from export markets.

Of the Baltic countries, growth was the biggest in Estonia, followed by Lithuania, though a slight fall was posted in Latvian sales.

Export to African countries soared over the year, and now 10 percent of pork legs produced in Estonia end up in the African market. In total, the company exports its output to 17-18 countries.
According to AC Nielsen, the market share of Rakvere Meat Factory, which is owned by Finland's HK Ruokatalo, was 32 percent in Estonia at the end of May. In the same period the share of Rigas Miesnieks, which is also owned by Rakvere, was 17 percent in Latvia, while that of Lithuanian subsidiary Klaipedos Maisto Mesos Produktai (Klaipeda City Meat Products) was 6 percent. In Estonia and Latvia Rakvere Meat Factory considers itself the market leader.

Meanwhile, CEO Olle Horm told reporters last week that the current labor shortage would affect Estonia's food industry even more in the future and diminish its competitiveness.
Horm said there was a shortage of employees at the Rakvere plant, explaining that the amount of manual work was inevitably high at the meat-packing plant. He added that it was not possible to automate all operations, particularly cutting meat.
Speaking of the labor shortage, Horm said one problem was people going to work abroad. He said some workers also went from the meat-packing plant to the Vest-Wood woodworking industry, another major employer in Rakvere.

To ensure the necessary labor, Horm said, the company was attempting to better organize employment activity and training. Rakvere trains almost all its employees, as vocational education in the meat processing sphere is non-existent.
The meat factory employs nearly 900 people in Estonia and the average wages in the company are about 8,500 kroons (543 euros). In Latvia, the group has about 180 employees and provides jobs to nearly 1,300 people.

Earlier this month, the meat factory said it would create some 30 new jobs this fall to cope with higher output.
Production director Meelis Pihlak was quoted as saying that the volume of meat cut production should increase by 40 percent, and the company would need to hire workers for a second shift.
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