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Operating environment

Raisio is an international multisectoral specialist and changes in operating environment affect the company's businesses in different ways. Common to our businesses was intensified competition in all markets in 2015. Raisio's key markets are the UK, Poland, Finland, the Czech Republic and Russia.

Economic development of Raisio's key markets

The growth in the euro zone is still more slowly than in the USA and UK. The European economy increased by 1.5 per cent which is, however, clearly more than in 2014. Growth was supported by the decline in crude oil prices and low-remaining interest levels. World economic growth in 2015 was slower than expected, but still above 3 per cent.

The UK economy grew by 2.5 per cent, mainly driven by household consumption. Consumer confidence, good salary and employment trends, as well as low inflation supported the growth.

In Finland, economic growth was extremely slow and GDP among the worst in the euro area.

The Polish economy grew by some 3.5 per cent with investments and growing consumer demand.

The sharp decline in Russia's economy continued, mainly due to the falling crude oil price trend.

Focus on innovations and competence as competition intensifies  

The situation in the European retail trade was difficult and pricing-related requirements further tightened. However, retailers need partners that innovate new products and promote the pioneering role of the food industry. Companies' cost-efficiency, competitive differentiation through expertise and agility to adjust to changes were emphasised.

British consumers want more value for money. Competition in the markets of cereals, snack bars and cholesterol-lowering functional foods further intensified. In the UK, retailers tightened their selection criteria, which intensified competition and further emphasised the importance of promotions. Consumers are also more health-conscious partly as a result of a long lasting public debate on sugar. Sugar levels in children's products, in particular, are closely monitored.

British consumers increasingly health-conscious

Confectionery markets in the UK and Czech Republic are mature and total consumption growth is modest. In the UK, free-from confectionery is a new consumer trend.

In Finnish retail trade, sales clearly declined and a new phenomenon was the price reduction campaigns focusing especially on food products. International demand for different oat products increased. Raisio has good opportunities for exports of processed oat products, such as oatbran, organic oats and pure oats.

Economic uncertainty continued in Russia. The share of less expensive products in the retail product range grew. The number of both producers and products available in the markets increased. Competition continued intense in the consumer goods markets.

Russia's import ban of dairy products affects the entire Finnish milk chain

The effects of Russia's ban on imports of dairy products are indirect and can be seen throughout the milk chain. In Finland, the decline in milk prices at the end of the year accelerated dairy farmers' switch to less expensive feeds with lower added value.

Summer 2015 was one of the best seasons in the history of fish farming, both in Finland and Northwest Russia. In Finland, total volume of fish production did not, however, rise significantly due to the long hot period in 2014. Waters became too warm and a considerable number of fry farmed for 2015 were lost. Feed deliveries remained stable throughout the summer.