Fazer Group is considering consolidating both of its Baltic-based bakeries into one production unit in Latvia which could lead to 185 job losses in Lithuania.
The Finnish group is looking at potentially consolidating “all production” of its Bakery Baltics division to a bakery in Ogre in central Latvia.
The group currently operates bakeries in Ogre as well as Kaunas in Lithuania.
The transition would involve an investment of €18m ($19.2m) for an “expanded warehouse for frozen and ambient products, new picking processes and modernised production capabilities”.
The changes would affect a “maximum of 185 employees” in Kaunas which could lead to the termination of employment. To run new operations in Ogre, Fazer said it would need to recruit up to 60 additional employees in Latvia.
The group added: “Consumers have become more price-conscious, and the market is increasingly campaign-driven which has led to price competition and lower margins.”
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By GlobalData
Anne Mere, managing director at Fazer Bakery Baltics, said: “Today we have a strong number two position on the Lithuanian and Latvian markets and a number three position in Estonia and our aim is to strengthen our positions.
“With one modernised production unit, we will have the opportunity to expand our known brands and product assortments into new categories and to meet different consumer demands even better than before.”
Fazer Bakery Baltics claims to be the third biggest bakery in the Baltic market with a presence in Lithuania, Latvia and the Estonian market. Fazer makes a variety of bakery products, such as toast, rye and wheat-based loaves and specialty products as portion breads, burger buns, polar breads, bread snacks and cakes.
Fazer Bakery Baltics is one of Fazer Group’s three bakery business units, alongside the Finland and Sweden divisions.
In 2023, it employed approximately 600 people and net sales totalled €54m. Fazer Group’s total bakery net sales were up 7%, reaching €463m.
“If these changes would realise, we would do our utmost to support our employees in Kaunas and help them find new jobs. Vacancies in other Fazer Group units would be offered with priority to those employees whose employment would possibly be terminated. We would collaborate with various partners and local Employment Service,” Mere said.
If these potential plans go ahead, the transition will be completed by the start of 2025.
