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Changes in Orkla Foods’ manufacturing structure

The Board of Directors of Orkla Foods Norge has decided today to move production operations from Gimsøy Kloster at Skien to other Orkla factories. The Board has also made a decision regarding the intention to change the company’s manufacturing structure at Rygge.

The employees at Rygge and Skien were informed of the decisions at general meetings today.

The Gimsøy Kloster factory at Skien (Orkla Foods Norge, Skien branch) will be closed down, and all beverage production will be moved to Kumla, Sweden. Fun Light and Tomtegløgg constitute the largest production volumes, but Gimsøy Kloster also produces powdered energy drinks and various drink essences, and these production operations will be moved to other Orkla plants. In early February, the employees were informed of the potential closure, and talks have been held with employees and their union representatives.

“We have discussed alternatives to closure, but maintain our conclusion that it is necessary to relocate the operations in order to keep up with the increasingly tough competition,” says Atle Vidar Nagel-Johansen, CEO of the Orkla Foods business area.

At present, Orkla Foods Norge has two factories at Rygge in Østfold county. The proposal entails moving most of the ketchup, mustard and dressing manufacturing operations to Orkla’s factory at Fågelmara, Sweden. Orkla Foods Norge wishes to continue to produce Nora vegetables at Rygge, concentrate its operations at one location and build up a logistics centre.

“This will strengthen our overall competitiveness in categories that are important for Orkla Foods. We will make more efficient use of the technology we have at the Fågelmara plant, while also developing effective logistics solutions and creating opportunities for innovation and growth in the vegetable segment at Rygge,” says Mr Nagel-Johansen.

A total of around 80 persons are currently employed at the two Rygge factories. The decision regarding the closure intention will now be discussed with the employees and their representatives. A final decision will be made by the Boards of Directors of Orkla Foods Norge and Orkla Foods Sverige in the course of May. If the intended changes are adopted, the plan is to gradually wind down production of ketchup, mustard and dressings at Rygge by the autumn of 2017. The intention is to relocate production of vegetables internally at Rygge in the spring of 2018.

“We need to concentrate production at fewer sites to ensure that we remain competitive in the future. This means that we find it necessary to close a number of factories, while increasing our investments at other facilities,” says Mr Nagel-Johansen.

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About Gimsøy Kloster

Gimsøy Kloster (formal name: Orkla Foods Norge, Gimsøy Kloster branch, Skien) is one of 14 factories in Orkla Foods Norge AS. The factory manufactures cordials, soft drinks and household and baking articles, in addition to drink mixes and essences. The factory has 24 employees.

About Idun Rygge and Nora Rygge

Orkla Foods Norge, Rygge Branch, currently consists of two factories, Idun and Nora. Tomato ketchup, mustard and dressings are produced at the Idun plant, while the long-standing production of sauerkraut and pickled gherkins takes place at the Nora factory. The two factories have a total of 80 employees.