20.12.2002: As part of its efforts to increase its competitiveness prior to the EU's eastward enlargement, Orkla Foods considers to move its production of frozen pizzas from Hungary to the Czech Republic. 70 production workers at Felix Hungaria can be affected by such a decision. Felix Hungaria plans to strengthen its marketing and sales activities in Hungary.
Production at the factory in Budapest will cease on 1 July 2003 at the earliest, and the possible lay-offs will not become effective until that date. All of the employees concerned will be offered severance pay.
Negotiations between representatives from the workers and the management team of Felix Hungaria have started. After the negotiations have been finalized, a final decision regarding production structure will be made in the end of January.
"We anticipate intensified competition in Eastern Europe as a result of EU enlargement. Trade barriers are falling, and it will be easier to ship products across national borders. We have analysed our production structure for frozen pizzas in Hungary, the Czech Republic and Poland. The analysis shows that it will be most profitable to coordinate production of frozen pizzas in Budapest (Hungary) and Rokytnice (the Czech Republic). We will maintain our present production operations in Kotlin (Poland)," says Knut Johannessen, Managing Director of Orkla Foods International.
"We will achieve greater economies of scale in both production and purchasing. At the same time, our pizza manufacturing expertise will be concentrated at a smaller number of plants," says Knut Johannessen.
Increased market activities in Hungary
The Hungarian market will continue to be important for Orkla Foods, and Felix Hungaria will be maintained as a company. The sales and marketing organisation will help create growth for Guseppe Pizza, Guseppe eat&go and Felix ketchup. Orkla Foods will consider launching several new products on the Hungarian market.
"We will do everything to ensure that our customers in Hungary are not inconvenienced by the possible coordination of our production operations," says Director Jozsef Kiss at Felix Hungaria.
In 2001, Felix Hungaria had a turnover of NOK 31 million and 100 employees. Guseppe Pizza has a 30% share of the Hungarian market. Guseppe eat&go which was recently launched on the market, has been well received.