Fazer exploring Baltic consolidation
Fazer Group is contemplating the consolidation of its Baltic-based bakeries, which would see it reducing its workforce by 185 positions.
Anne Mere, MD of Fazer Bakery Baltics, emphasized the company’s intention to fortify its market positions by centralizing production. Fazer Bakery Baltics claims to be the third-largest bakery in the Baltic market, operating in Lithuania, Latvia and Estonia.
“Today we have a strong number two position on the Lithuanian and Latvian markets and a number three position in Estonia and our aim is to strengthen our positions,” said Mere.
“With one modernized production unit, we will have the opportunity to expand our known brands and product assortments into new categories and to meet different consumer demands even better than before.
“Consumers have become more price-conscious, and the market is increasingly campaign-driven, which has led to price competition and lower margins.”
The Finnish conglomerate is exploring the potential of merging two bakeries into a single production facility in Ogre, central Latvia. A $19.2m investment will enhance warehouse infrastructure, upgrade production capabilities and streamline picking processes for frozen and ambient products.
The transition, however, will also impact the workforce at the Lithuania facility, potentially resulting in job terminations. However, the new facility in Ogre will require the recruitment of up to 60 additional employees.
“If these changes were to realize, we would do our utmost to support our employees in Kaunas and help them find new jobs,” added Mere.
“Vacancies in other Fazer Group units would be offered with priority to those employees whose employment would possibly be terminated. We would also collaborate with various partners and local Employment Service.”
Fazer Bakery Baltics produces a diverse range of bakery products including toast, rye and wheat-based loaves, portion breads, burger buns, polar breads, bread snacks, and cakes. It is one of Fazer Group's three bakery business units, alongside its divisions in Finland and Sweden.
In 2023, Fazer Bakery Baltics generated revenue of €54m, employing a 600-strong workforce. That year, the total bakery net sales for Fazer Group witnessed a 7% increase, reaching €463m.
Should it happen, the consolidation is expected to be concluded by the start of 2025.