Atria sold its Linnamäe pig farm in northern Estonia to local farmers after deciding not to use funds to modernise the facility and instead invest in its other operations in Estonia.
The company says it is not a sign of it gradually moving out of the Estonian market.
To get the farm up to Atria’s production strategy standards would have cost a “significant investment in production facilities and equipment,” the company said.
‘Costs are high’
But the cost of getting the farm up to required standards was not the only reason the firm has opted to sell its northerly pork farm. Logistics played a big part in the decision to sell, according to Olle Horm, managing director of Atria Baltic.
“It [the farm] is quite distant from our Estonian slaughterhouse and is about four-and-half hours’ drive so the delivery and transportation costs are quite high, and therefore the costs of managing the farm are quite high also,” said Horm.
The slaughterhouse is located close to Latvian boarder, in a town called Valga.
“We plan to direct the investment into other big areas in Estonia,” Horm added.
Atria said he sale of the Linnamäe pig farm will cause approximately a €1m (£79k) loss in sales in the short-term, but this will stabilise in the long-term with new investments.
Commenting on Estonia in the company’s first quarter financial results, Atria’s CEO Juha Gröhn, said: “Our industrial efficiency in Estonia will improve as production is centralised in one factory – Valga. Our sales to retail customers increased, while industrial sales fell. The price of fresh meat has decreased year-on-year and price trends for meat products have been more stable.”