Fazer Bakery Baltics considers consolidation

Helsinki / FI. (fg) Finland’s Fazer Group aims to strengthen its positions in all its markets. As a part of its strategy, Fazer is considering consolidating both Baltic bakeries into one production unit in Ogre in Latvia. The investment, including a modern warehouse, new picking processes and renovated production would total EUR 18 million, a significant investment in the Baltic bakery market. Due to this change, Fazer initiates consultations that could lead to the reduction of a maximum of 185 employees in Kaunas.

Fazer Bakery Baltics is considering consolidating all production to one modern bakery in Ogre. Through this transformation Fazer would be able to strengthen its positions in the Baltic markets, ensure competitiveness, widen the product assortment into new categories and be able to further develop export sales. Having one common factory together with an expanded warehouse for frozen and ambient products, new picking processes and modernised production capabilities would also improve Fazer Bakery Baltics’ supply chain efficiency, crucial for all three Baltic markets. The investment would total EUR 18 million, a significant investment in the Baltic bakery market. Today Fazer has bakeries in Kaunas (LT) and in Ogre (LV).

«Today we have a strong number 2 position on the Lithuanian and Latvian markets and a number 3 position in Estonia and our aim is to strengthen our positions. With one modernised 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,» explains Anne Mere, Managing Director of Bakery Baltics.

The consumption of packed bread products has decreased in the Baltics for several consecutive years and in the last year the bakery market has dropped in volume by 2 percent according to ACNielsen Jan2024 versus Jan2023 Baltic market volume share data. Consumers have become more price-conscious, and the market is increasingly campaign-driven which has led to price competition and lower margins.

The aim is to strengthen the positions in the Baltics

If the plans were to realise, the transformation of the production would be conducted during the coming autumn-winter period and would be completed by the beginning of 2025.

Fazer Bakery Baltics remains strongly committed to the Lithuanian market. The Lithuanian commercial unit with support functions would continue to operate locally. Partnerships and sales to Lithuanian customers would continue and the company will do its utmost to ensure a smooth transition. All customer deliveries would continue as usual through Lithuanian logistics partners.

Fazer initiates consultations and supports its personnel during the change

These possible changes would have an impact on the personnel. Therefore, Fazer initiates consultations with the work council. The changes would affect a maximum of 185 employees in Kaunas that could lead to the termination of employment. To run new operations in Ogre, Fazer would need to recruit up to 60 additional employees in Latvia.

«If these changes would realise, we would do our utmost to support our employees in Kaunas and help them find new jobs. Vacancies in other Fazer Group units would be offered with priority to those employees whose employment would possibly be terminated. We would collaborate with various partners and local Employment Service,» Anne Mere concludes.

About Fazer Bakery Baltics: The third biggest bakery in the Baltic market with a strong second positions in Lithuania and in Latvia and third position in Estonian market. Fazer offer consumers a variety of bakery products, such as toasts, rye and wheat based loafs and specialty products as portion breads, burger buns, polar breads, bread snacks and cakes. Fazer Group is a forerunner in value-added products and investing into its strong brands. Fazer Bakery Baltics is one of Fazer Group’s three Bakery business units. In 2023, it employed approximately 600 people and net sales totalled EUR 54 million.