The Board of Directors of Lilleborg AS has decided today to move production from Ello in Kristiansund to Falun. The employees at Ello have been informed of the decision at a general meeting.
In early January, the Ello employees were informed that Orkla Home & Personal Care’s future factory structure was to be assessed, as a result of which production operations might be moved from Ello to Falun.
The employees have been widely involved and actively engaged in the assessment process, in which a number of alternatives have been considered. The employees and management did not agree on the recommendation based on the results of the assessment. In addition to the management’s recommendation, the Board of Directors of Lilleborg AS has therefore also considered the employees’ alternative recommendation of continued production at Ello in a downsized organisation.
The Board of Directors of Lilleborg AS postponed its decision on Ello from Monday, 25 April to Tuesday, 26 April, in order to consider a concrete proposal presented by local stakeholders.
“We appreciate the initiative submitted by local investors, but it does not change the situation on which our decision to relocate production is based. However, we would like to enter into a dialogue with them, to examine to see whether we can contribute to providing a favourable environment for new activities in the area,” says Stig Ebert Nilssen, Chair of the Board of Directors of Lilleborg AS.
Orkla Home & Personal Care competes with global companies in categories highly exposed to competition that are under strong market pressure and pressure to innovate. Since Orkla’s acquisition of Cederroth, Orkla Home & Personal Care has had four relatively small factories in the Nordic region, in Kristiansund, Flisa, Ski and Falun. To some extent, these factories have overlapping technology.
“Our competitors have already carried out extensive structural changes, as a result of which they have competitive advantages over us that they are exploiting in the Norwegian market. Consequently, we too need to make changes to ensure our long-term competitiveness,” says Knut Eckhoff, Supply Chain Director at Orkla Home & Personal Care.
“We know that the decision to move production is a heavy blow to the 60 employees at Ello, and we will now give priority to providing assistance in a difficult situation. We will do what we can to help the employees move forward,” Mr. Eckhoff says.
Production will continue at Ello until late 2017, at which time the move is scheduled to have been completed.
The Board decision also entails moving the production of liquid detergents that currently takes place in Falun to the factory at Ski. This means that the Ski factory will become exclusively a detergents factory, while the factory in Falun will manufacture only personal care products.
Knut Eckhoff, Supply Chain Director, Orkla Home & Personal Care, mobile + 47 909 20 257
Anne Gjemdal, Communications Manager, Orkla Home & Personal Care, mobile + 47 928 52 099