Greetings, this is a very relevant discussion, so I’ll comment on this whole with a few thoughts. First, to Pita Factory. This business was acquired during Fodelia’s original strategy in the midst of the pandemic, when it was decided that the group needed a business focused on retail trade. The foodservice market was completely frozen (schools closed, lunch spots closed, etc.). Pita breads came as part of the Perniön Liha / Helsingin Makkaratehdas deals, albeit as a separate company. The companies had cross-production, which is why the whole consisted of two different companies.
In connection with Fodelia’s strategy change, it was decided to focus on Feelia’s and Oikia’s businesses as a food industry player. A brokerage assignment was given for other businesses. As a result, the Perniö Liha and Helsingin Makkaratehdas businesses were sold to two different buyers (Uusi Perniön Liha and Tapola). In this context, for example, the filling of pita breads (which was a much larger business than making the breads themselves) was sold to Tapola. Fodelia recorded a sales profit from this deal. Only the pita bread factory in Jokioinen remained. The broker offered the target widely, but the bread factory alone did not sell under any conditions. Fodelia had the option of closing the factory or selling the target to a related party, who was interested in seeing if the company could be made profitable in any way. It should be noted that the Jokioinen factory property had years of lease liability, as well as installment debts for machinery and equipment. If no successor had been found for the factory, these would have fallen to Fodelia. The financial responsibility for these was hundreds of thousands of euros at the time of the sale.
After just over a year, one can ask whether the deal was in the company’s best interests or not. I am still absolutely of the opinion that the deal was in the best interests of Fodelia’s shareholders. The idea that the deal should have been rejected on the basis of related party status would not, in my opinion, have been in the company’s best interests. And from a responsibility perspective, it’s quite peculiar – to close down a factory and lay off staff simply because someone might be offended by a possible related party transaction. I myself did not participate in the negotiations for this deal or in the decision-making process.
The online store has been part of the group since the COVID years. During the online store boom of the COVID era, it was a very sensible business. Unfortunately, since then, growth has not been achieved despite heavy investments. The business has been unprofitable by hundreds of thousands of euros. For the past while, one person has worked in the online store. After various alternatives, either closing the store and disposing of inventory and packaging materials, etc., or finding a successor remained. The executive management negotiated with related parties about continuing the business, and the board, taking into account conflict of interest issues, decided to sell the businesses to the successors. For Feelia, the essential thing is that the successor will continue to act as a reseller for Feelia’s small packages. This enables sufficient volumes for sensible industrial production of small packages, as these same products are also delivered to small customers in Feelia’s normal supply chain. For example, the Oikiaruoka brand was not transferred in the deal, but the new company will build its own online store brand after a transition period. This is not really a business sale in the traditional sense, but more of a resale agreement. If someone else wants to be a reseller of Feelia’s products, they can, for example, start selling on the Shopify platform even next week. The executive management has negotiated this whole, and the board has made decisions taking into account conflict of interest issues.
It has been criticized in public that the announcement did not mention related party transactions. In retrospect, it would have been wise to mention the matter. Whether the aforementioned transactions have caused reputational damage to the company or shareholders remains to be seen. However, I can sincerely say that Fodelia’s best interest has been the most important interest in these matters. If this had not been the case, the executive management would not have presented these deals to the board, nor would the board have approved them.
Fodelia’s strategy of focusing on core businesses continues – it will benefit all Fodelia owners and customers in both the short and longer term.
investors were given a slightly polished picture of the “film situation” in the autumn…