The company, which is responsible for the HKScan Group’s Finnish operations, is seeking cost savings and improved productivity through this specialisation.

HK Ruokatalo said it also intends to continue to offer whole broilers and bone-in chicken products, and has studied the possibilities of sourcing Finnish raw material for the manufacture of these.

Ruoka-Saarioinen Oy, a part of the Saarioinen Group, has been planning to specialise in processing bone-in chicken while also continuing the comprehensive processing and sales of all chicken products.

HK Ruokatalo and Ruoka-Saarioinen have discussed the possibility of sourcing the meat raw material for chicken products from each other with the goal of both parties ensuring the sufficient supply of Finnish raw materials for their own product manufacture. The two companies have signed a preliminary agreement under which HK Ruokatalo would source the raw materials for bone-in chicken leg and split breast products as well as whole broilers from Saarioinen while Ruoka-Saarioinen would acquire its boned chicken raw material from HK Ruokatalo.

When implemented, the arrangement would generate efficiency benefits and increase capacity utilisation rate and productivity at both companies, which will ultimately also benefit consumers, HK Ruokatalo said.

Both HK Ruokatalo and Ruoka-Saarioinen can also be mutually assured of a constant supply of Finnish raw materials. The contractual arrangements will have no impact on the competitive relationship between the two companies or their product offerings.

The final deal is conditional on meeting competition legislation.

In 2007, HK Ruokatalo’s plant in Eura processed 42.5 million kg of chicken while the annual processing volume at Ruoka-Saarioinen’s Sahalahti plant was 10.8 million kg.