Radical reformer of Lihakunta: Paavo Jauhiainen
In the 1950s, a basis was created within Lihakunta for the development of a large Savonian company. A stagnant period followed, during which the co-operative awakened to the future needs for change. The radical reformist spirit needed was missing, but this changed when zealous reformer Paavo Jauhiainen assumed the lead position in 1977.
Up until the mid-1970s, Lihakunta’s growth was based on production investments. However, the management realised as early as the late 1970s that genuine competitiveness was needed in order to succeed. Lihakunta’s competitors included not only strong Finnish players but also foreign companies.
There was a realisation in the 1970s that the company’s development was slowed by the co-operative idea of a basic mission. Previously, it was thought that getting farmers a fair price for meat and, thereby, an opportunity to earn a living was enough for Lihakunta.
It was not enough for Paavo Jauhiainen (b. 1945). He believed making sure that a company was competitive and profitable was the way of the future. Jauhiainen, who had worked as the manager of Lihakunta’s communications and organisational department, was appointed managing director at the age of 32 and began to reform Lihakunta with great vigour.
Jauhiainen set in motion a whirlwind of events within the co-operative. When the dust had settled, Lihakunta had turned into a cutting-edge meat company.
The transformation of the corporate culture started with the training of employees, management and administration. Production was rationalised, but it was also streamlined through heavy investments. In practice, the change meant shifting from the break-even target of co-operative operations to truly pursuing competitiveness and good results. This required knowledge, skills and devotion. Despite his young age, or perhaps because of it, Jauhiainen had all these qualities. In the end, being young was probably more of an advantage than a disadvantage to him. Jauhiainen, a workaholic, began to work 70 hours a week.
The first national mergers took place in the late 1960s. Osuusteurastamo Karjapohjola and Lihakunta merged in 1972. After the merger, Lihakunta’s area of operation at the beginning of Jauhiainen’s term covered about 60 per cent of the country in the east and north. Consequently, Lihakunta controlled the so-called northern dimension.
Although Lihakunta’s productivity grew steadily in the 1980s, it was noticed that this was not enough in Finland. Lihakunta, under the leadership of Jauhiainen, therefore put to use all the tools of the market economy. This decision led to the founding of Lihapolar Oy in 1988.
The next step was the merger of Itikka-Lihabotnia Oy and Lihakunta-Lihapolar in 1990. This had already been planned in the 1980s, but the time had not been ripe then. It was now, and that is how Itikka-Lihapolar Oy, which soon acquired Pohjanmaan Liha Co-operative’s industrial and marketing operations, was formed – in the think tank of Ostrobothnian Seppo Paatelainen and Savonian Paavo Jauhiainen. These two men also contributed to the closing down of the central co-operative organisation, Tuottajain Lihakeskuskunta (TLK). The foundation for the present-day Atria Plc had thus been laid.
When he retired, zealous reformer Jauhiainen said he had a fighter’s soul, a good Samaritan’s heart, a strait-laced Lutheran’s mind and a manic-depressive’s psyche.
“If the post hadn’t been in Savonia, I would have refused,” said Jauhiainen before he was appointed managing director. He promised then that he would stay in Savonia no matter what. And he kept his promise.
Paavo Jauhiainen was born in 1945 and was the youngest of the family’s ten children. He graduated from Kuopio secondary school in 1965 and from the University of Helsinki’s Master of Science in Agriculture programme in 1972.