The agreement will see Raisio take over Lantmännen's 25 per cent share of the Finnish mill Melia, in which it already holds the remaining 75 per cent shares. In return, Raisio will hand over its 50 per cent share of the joint venture GoGreen AB and its 27 per cent share of the Latvian mill company AS Rigas Dzirnavnieks to Lantmännen. Raisio said the move is part of its strategy to improve profitability by simplifying group structure and enhancing business management. The new ownership arrangements are expected to improve Raisio's operating result by €3 to €4m in 2008. Melia, which will be wholly owned by Raisio, is a milling business that produces flour, flakes and pasta. Raisio's CEO Matti Rihko said: "With Melia wholly owned by Raisio, we will have better possibilities to develop the leading cereal brand Elovena independently. These agreed ownership arrangements will continue the streamlining of Raisio's business operations. They will improve profitability, simplify group structure and decision making as well a enhance business management." Raisio has three main business segments: its food division, which encompasses Melia; a feed and malt division; and an ingredient division, which is primarily centred on its Benecol ingredient. The two former divisions each account for around 45 per cent of the company's total business, while its ingredient operations account for around 10 per cent. Raisio told FoodNavigator.com that although it will be completely exiting the Rigas Dzirnavnieks business with the sale of its shares, the company still plans to collaborate with the GoGreen business, which supplies soy and oat products to retail. "It's very interesting and we want to be in the business, we believe people want more natural plant-based food," said a company spokesperson. Although Raisio has sold its 50 per cent share in GoGreen, it said it will continue to cooperate with Lantmännen to sell some of the products. Raisio announced its strategy to improve profitability at the beginning of 2007. Other actions the company took last year in order to execute this plan include the sale of its potato and diagnostics businesses. The firm also closed margarine production in Russia, as well as rye and wheat mills in Finland.
