Fazer Group is contemplating the merger of its two Baltic bakeries into a single production facility in Latvia, which may result in the loss of 185 jobs in Lithuania.
The Finnish conglomerate is considering centralising “all production” of its Bakery Baltics division to its existing facility in Ogre, Latvia.
Presently, the group operates bakeries in both Ogre and Kaunas, Lithuania.
This consolidation would necessitate an investment of €18 million to enhance the site, including “an expanded warehouse for frozen and ambient products, new picking processes, and modernised production capabilities”.
As a result of these changes, up to 185 employees in Kaunas could face termination. Meanwhile, to accommodate new operations in Ogre, Fazer anticipates hiring up to 60 additional workers in Latvia.
The group observed: “Consumers have become more price-conscious, and the market is increasingly campaign-driven which has led to price competition and lower margins.”
Anne Mere, the Managing Director of Fazer Bakery Baltics, stated, “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. 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.”
Fazer Bakery Baltics is recognised as the third largest bakery in the Baltic region, operating across Lithuania, Latvia, and Estonia. Fazer produces a diverse range of bakery items, including toast, rye and wheat breads, and specialty items like portion breads, burger buns, polar breads, bread snacks, and cakes.
Fazer Bakery Baltics operates alongside Fazer Group’s bakery units in Finland and Sweden.
In 2023, it employed around 600 people and reported net sales of €54 million. Fazer Group’s overall bakery net sales increased by 7%, reaching €463 million.
Mere added, “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.”
Should these proposed plans proceed, the transition is expected to be completed by the beginning of 2025.