Atria Group’s main architect: Seppo Paatelainen
As the director of an Ostrobothnian co-operative slaughterhouse, Seppo Paatelainen challenged the traditional co-operative virtues and structures, turning the provincial meat producer into a national market leader. After joining the European Union, Finland did not lose its own meat production as was feared. On the contrary, companies such as Atria Plc, under the direction of Paatelainen, set out to conquer the meat markets in neighbouring countries. Over the years, the production chain had been rationalised to make it competitive.
Seppo Paatelainen grew up on a farm in the municipality of Sumiainen in Central Finland, went to secondary school in a neighbouring municipality and left for the University of Helsinki in 1962 to study agricultural science. He specialised in meat technology and, after a short period as a researcher, took up the post of production manager at co-operative slaughterhouse Etelä-Suomen Osuusteurastamo in 1968. A couple of years later, he transferred to Seinäjoki-based Itikka Co-operative and became its production director.
In these managerial duties, Paatelainen learned the importance of profit responsibility early on. Mergers were taking place in the meat sector, but at this stage, the changes only affected Itikka by slightly expanding its business area. The company was branching out with plans to acquire a site in Nurmo, beyond the city borders. Meanwhile, Paatelainen was making improvements in sausage-making technology.
When Itikka was looking for a new director in 1987, production director Paatelainen was appointed.
Paatelainen worked hard in his new position and soon contributed to the transformation of the co-operative slaughterhouse business as a whole. First, he challenged the co-operative form of business. In the 1980s, it made obtaining capital for investments difficult. Co-operative slaughterhouses Lounais-Suomen Osuusteurastamo (LSO) and Lihakunta were also planning to register their production operations as private companies, but Itikka was the first to turn this plan into reality. In 1988, it established a limited company, Lihabotnia, and went public. Itikka continued to be responsible for meat procurement.
The next step was the merger of Itikka-Lihabotnia Oy and Lihakunta-Lihapolar in 1990. The managing director of the latter, Paavo Jauhiainen from Kuopio, was also a strong advocate of change. Together, these two men began to pursue the closing down of the central co-operative organisation, Tuottajain Lihakeskuskunta (TLK) [linkki vuoteen 1991: Yhteentörmäys oman keskusliikkeen kanssa]. TLK, which had already acquired a company called Helsingin Kauppiaat (HK), had begun to construct a large meat processing plant in Vantaa. There were suspicions in the provinces that TLK was planning to turn its members into mere suppliers of raw material. After a complex and controversial process, TLK was dismantled in 1991. LSO was given HK-Ruokatehdas, which was about to be completed, and Itikka-Lihapolar Oy inherited the Atria brand.
Itikka-Lihapolar’s food factory in Nurmo was inaugurated in 1992, in the midst of Finland’s deepest recession and initial preparations for Finland’s EU membership. The destruction of the entire Finnish meat sector seemed on the horizon. Atria, which had operations in several locations, chose a strategy of rigorous reorganisation and concentrated its production in Nurmo.
Paatelainen’s view was that business must not be allowed to stagnate. In 1997, Atria Plc began to look into expanding to neighbouring countries. Sweden’s meat processing industry was in bad shape for the EU, so Atria purchased Swedish capacity and brands. As a consequence, Sweden accounted for almost 40 per cent of Atria’s business in 2002. In Russia and the Baltic countries, Atria was not as successful in Paatelainen’s time, but exports were taken to more than 20 countries. The shipping department in Nurmo was automated and turned into an effective logistics centre in 2000.
Farm owners in Paatelainen’s own province supported him in all situations. His strongest and longest-standing supporter was the chairman of Itikka Co-operative’s and Atria’s boards of directors, Reino Penttilä.
CEO Seppo Paatelainen (b. 1944), MSc (Agriculture and Forestry), retired in 2006. The following year, the president of Finland awarded him the honorary title of ‘vuorineuvos’ (awarded to individuals in recognition of their services in industry). Since his retirement, Paatelainen has served on the governing bodies of several organisations and companies.
Source: Edited from the original text by Mäkinen, Riitta 2008. The Finnish original is available at http://www.kansallisbiografia.fi/talousvaikuttajat.