Just as you mentioned, HKFoods is subject to the same laws as other listed companies, but the controlling power of the LSO Cooperative (LSO-Osuuskunta) is visible in the company’s decisions. I’ll nitpick a bit and point out that HKFoods does not buy animals from the LSO Cooperative. The contracts are between the company and the producer. A contract producer can also operate without being a member of the LSO Cooperative.
This is where I disagree with you. The cooperative’s will may be contrary to the interests of an ordinary investor. Let’s look back at the past. The company fell into a debt spiral because the investment in the Rauma poultry plant hit a major snag. The mountain of debt currently being cleared was partly built on birds that were practically bought straight into waste. The production lines didn’t work, and the birds had to be hauled directly to Honkajoki. Following the Rauma investment decision, producers had been given contracts for larger production volumes, so they invested in new poultry houses, and since broiler production is such fast-paced farming, the birds started coming in quite heavily. At this point, the company should have restricted production until the plant was in shape. This was not done. Here, one can wonder if the decision was in the company’s best interest or if the LSO Cooperative producers’ own interests influenced the decision. This is my own perception of the events. There are no sources for these claims, so it’s at the reader’s discretion.
As the controlling shareholder, the LSO Cooperative has dictated, through the producers’ voice, that meat processed by the company in Finland must be domestic. This policy is quite understandable, and given the cost of Finnish labor, it’s not worth processing foreign raw materials in Finland anyway. Now that HK Ruokatalo—after its era as the Baltic Sea region’s HKScan and the sale of all significant foreign operations—is once again HKFoods operating in the domestic market, one might wonder if the company’s crisis sales would have been different with a different controlling owner? In the end, all three domestic producer sectors—pork, beef, and poultry—remained.
If you invest in HKFoods, it’s good to understand that for the controlling owner, domestic meat production takes precedence over shareholder value creation for the retail investor.