Personnel negotiations concerning the Finnish pharmaceutical distribution operations of Oriola Oy and relating to the restructuring arrangements introduced in April in the Wholesale and Distribution Division of the Orion Group have been completed. The measures are a continuum to already implemented arrangements for improving productivity and capacity utilisation. In the demerger of the present Orion Group, the Wholesale and Distribution Division will constitute the Oriola-KD Group, the parent company of which will be listed as Oriola-KD Corporation on the Helsinki Stock Exchange at the beginning of July 2006.
The starting point in the personnel negotiations was to reduce the number of regional wholesale centers of Oriola in Finland by shutting down the sites in Kuopio and Seinäjoki and by centralising the deliveries of pharmaceuticals and healthcare products as well as the main part of services into Espoo and Oulu. The consequent need to reduce personnel in Seinäjoki and Kuopio was estimated to be about 90, the measures concerning all personnel groups.
The negotiation procedure has resulted in redundancies of altogether 82 persons in the Kuopio and Seinäjoki sites of Oriola. The operations in Seinäjoki will be closed as of about 13 September and those in Kuopio as of about 27 September 2006. When centralising operations into Espoo and Oulu, a second work shift will be introduced in Oriola's warehouses in Espoo as of 4 September 2006. The working time arrangements will result in longer open-hours for daily order intake whereby customer service is improved.
The centralisation of the Finnish distribution operations will lead to the creation of about 30 new jobs in Espoo, against previously estimated 40 persons. The employees becoming redundant in Seinäjoki and Kuopio will be prioritised to these opportunities. The total net reduction of about 50 persons in the Finnish distribution operations is in line with the initial estimation. As part of the efficiency measures, the premises in Kuopio and Seinäjoki will put up for sale during the third quarter of 2006.
Kronans Droghandel AB (KD), which operates in Sweden, has already centralised its distribution operations as a measure to adjust the cost structure, and additional actions are being taken. Negotiations concerning a further downsizing by about 20 employees are estimated to be completed in the course of June 2006.
The aim of the efficiency measures in Finland and Sweden is to achieve annual cost savings of about EUR 5 million, with full impact as of 2007. The arrangements are estimated to cause about EUR 3 million in one-off items in 2006.
The total personnel in the Wholesale and Distribution Division is about 1,530 of which 1,100 are working in Oriola and 430 in KD. Altogether about 400 employees of Oriola are engaged in the logistic operations in Finland, the regional sites in Seinäjoki and Kuopio employing about 45 persons each.
Orion Corporation
Jukka Viinanen Olli Huotari
President and CEO General Counsel
Contact persons:
Kimmo Virtanen, CFO, Wholesale and Distribution Division of the Orion Group
Tel. +358 10 429 2069, gsm +358 50 429 2069
Eero Hautaniemi, President, Wholesale and Distribution Division of the Orion Group
phone +358 10 429 2109, gsm +358 50 429 2109
phone +358 10 429 2109, gsm +358 50 429 2109
Distribution:
Helsinki Exchanges
Media
Publisher:
Orion Corporation
Corporate Administration
Orionintie 1A, 02200 Espoo
Homepage: www.orion.fi