Fazer considers discontinuing dairy business at its Koria factory

Helsinki / FI. (fg) Fazer Lifestyle Foods, domestic division of Finland’s Fazer Group, is strongly focusing on its core business and the execution of its plant-based strategy and is therefore considering changes in production at the Koria factory. If the plans are realised, the Koria factory will in the future focus solely on the production of oat drinks and other oat-based products, which would lead to the discontinuation of the dairy production. Due to this, Fazer initiates change negotiations affecting 226 employees. The company estimates that the negotiations could lead to the termination of a maximum of 95 permanent employment.

The planned changes are part of Lifestyle Foods’ strategy aiming at leveraging the company’s strengths in oats and increasing the share of plant-based products. Focusing on the production of oat-based products would lead to the discontinuation of the dairy operations, which are not part of the core business.

Fazer is a leading manufacturer of oat products in the Nordics and has invested over EUR 300 million in the production of oat products in its home markets during the past three years. For example, the production capacity of oat drinks at the Koria factory was doubled last summer. Fazer is actively developing plant-based food solutions of the future, in which oat drinks play an important role.

Fazer has evaluated the efficiency of its dairy operations

Fazer is a small player in the Finnish dairy industry mainly producing private label products. Due to the low volumes and high complexity in a category driven by scale, being competitive is very challenging for Fazer.

«With our small scale in dairy production, we are uncompetitive and have been challenged even more in the recent inflationary environment. Improving efficiency of our Koria operations is inevitable to secure our competitiveness. A possible discontinuation of the dairy production would enable us to focus on our plant-based core business, in which the Koria factory plays an important role in the future,» says Kati Rajala, Vice President of Fazer’s Non-Dairy and Dairy Business.

Fazer supports its personnel in change

Fazer initiates change negotiations on financial and production-related grounds. The change negotiations affect 226 employees, and the company estimates that the negotiations could lead to the termination of a maximum of 95 permanent employment. The possible discontinuation of the dairy business would take place in August 2023. Rajala: «If the dairy business were to be discontinued, we will support our employees and will do our utmost to help them find new jobs. Vacancies in other Group units will be offered with priority to those whose employment would possibly be terminated. We will also liaise with the employment administration. We purchase milk from 20 dairy farmers in Southern Finland. These farms are well kept and viable, and we are convinced that many dairies are interested in cooperating with them.»

Fazer in Koria

  • At its factory in Koria, Fazer produces high-quality, plant-based Fazer Aito oat drinks, cooking products and snacks, all made of Finnish oats. In addition, the factory produces dairy products, mainly for private label brands.
  • The Koria factory is a modern production facility, located close to the city of Kouvola and employs approximately 220 people.
  • Fazer acquired Kaslink in 2019 as part of its strategic aim at becoming a leading producer of plant-based products in Northern Europe. The Koria factory became part of Fazer along with this acquisition.
  • Fazer is a forerunner in oats and continues to invest in the product development and production of oat-based products, in which the Koria factory plays an important role.

Fazer Lifestyle Foods

  • Fazer Lifestyle Foods responds to the growing demand for healthy and plant-based food, especially among consumers who follow sustainable lifestyles.
  • It offers modern consumers a variety of non-dairy products, breakfast products, and smoothies. The product range also includes flours, mixes, and ingredient solutions like xylitol for businesses.
  • Fazer Lifestyle Foods is one of Fazer Group’s three business areas. In 2021, it employed approximately 550 people and net sales totalled EUR 180 million.