Lagerbergs – Aiming for growth

Strategy

Lagerbergs – Aiming for growth

Atria acquired the poultry company Lagerbergs in spring 2016. A few months after the acquisition, Atria decided to invest EUR 14 million in the comprehensive development and expansion of the production plant. The investment aims for growth, supported by the strong popularity of chicken in the Swedish consumer market.

Lagerbergs’ production facilities in Norjeby, Blekinge, remain operational during the renovation and expansion of the plant.

– We are modernising the entire production chain, from rearing to slaughtering, butchering and packaging, says Juha Sarkkinen, General Manager, Poultry at Atria Scandinavia.
– While we are increasing the production capacity, we are also carrying out strategic work related to the Lagerbergs brand, product development and marketing.

The expansion of the production plant will produce results in 2018. By increasing capacity, Atria aims to grow its production of chicken by 25 per cent. This means that its production volume will increase from 10 million to 12.5 million chickens next year.
– We are investing in growth. The Swedish chicken market has been strong for several years. Recently, production has been hampered by campylobacter infections, which have caused consumer demand for chicken to decrease in Sweden. This has had a negative effect on the demand for Lagerbergs’ products. However, I am confident that the demand will resume growth during 2018, says Sarkkinen.

"While we are increasing the production capacity, we are also carrying out strategic work related to the Lagerbergs brand, product development and marketing."

Expansion to be completed in March 2018

Two new chicken rearing facilities have already been completed in Norjeby, as well as the renovation of the existing rearing facilities.

A new slaughterhouse, butchering line and filleting line will be completed next, and the refrigeration technology will be replaced.
– We are also planning to carry out other modernisation projects. This work will begin in the staff facilities and butchering and packaging departments at the beginning of 2018. In addition, we will make changes to our internal logistics. Some lines will be moved to ensure better logistics. Everything will be completed by the end of March 2018, says Tommy Johansson, Local Manager at Lagerbergs.

According to Johansson, the work in progress at Lagerbergs is about replacing any outdated technologies with modern ones. Generally, all old equipment will be replaced.
– This investment enables Lagerbergs to develop rapidly. In addition to increasing capacity, the new investments in rearing facilities improve animal well-being. We are also investing in the work environment. Atria’s centralised operations have enabled us to pay special attention to these issues, and we have the resources to take the entire plant to a new level.

"In addition to increasing capacity, the new investments in rearing facilities improve animal well-being."

Market share is growing

The focus of Lagerbergs’ operations has shifted since Atria acquired the company.
– Previously, we produced more whole, uncut poultry, but are now increasingly moving towards cut products, says Johansson.
– We currently have around 10 per cent more product items than a year ago. As a result of this, the market share of our cut products in the grocery trade has increased by 9 per cent from last year. At the same time, our competitors’ market shares have decreased.

Lagerbergs’ key goals include developing the selection continuously and adapting to modern market demand.
– In this respect, the company benefits greatly from the Group’s resources, says Sarkkinen.
– In addition to having expertise in innovation, trends, consumer behaviour and the future, it is important that we make use of chicken raw material in the development and strengthening of our other brands.

At the moment, Atria uses Lagerbergs’ chicken in Lithells’ sausages, for example, and Mariannelund’s selection includes smoke sauna-cured chicken cuts.

There are plenty of opportunities for cooperation.

Thanks to the investments in the production plant and marketing, the future is looking fascinating for Lagerbergs.

Lagerbergs

• Established: 1965
• Employees: 120
• Operations: Norjeby (production) and Sundbyberg (marketing)
• Products: whole and cut chicken, fresh and frozen, natural and seasoned
• Annual production: around 10 million chickens
• Size: The third largest player in the Swedish chicken market
• Market shares: slaughtering around 10 %, Lagerbergs brand around 3 %

(This article was published in the 3/2107 issue of Atria’s personnel magazine.)