Enhanced Production Efficiency and Value Focus by Danish Crown

Danish Crown is taking action in response to a difficult two-year period for Denmark's pig slaughtering industry. The reduced supply of pigs for slaughter in Denmark has impacted the efficiency of the group's Danish slaughterhouses. As a result, Danish Crown is decreasing the number of production sites in Denmark and focusing future investments on processing the pigs owned by the group into products like bacon and pepperoni, rather than primarily supplying raw materials to global customers. The proposed closure of the Ringsted slaughterhouse will lead to the loss of nearly 1,200 jobs. However, around DKK 250 million will be allocated for other investments over the next three years, which is anticipated to generate up to 300 new jobs in Horsens, Herning, Vejen, and Blans near Sønderborg. These changes will strengthen Danish Crown's standing as Europe's top meat-based food company. Jais Valeur, Group CEO at Danish Crown, expressed that the decision to close the Ringsted slaughterhouse was difficult but necessary for the company's evolution into a modern food company. The aim is to enhance efficiency at the slaughterhouses and increase the sale of processed products to key European customers. The strategy to boost the share of processed products was first introduced in the group's 2021 strategy, Feeding the Future. Danish Crown shifted its growth strategy from slaughtering more pigs to increasing the value of Danish pork through processed food production and a greater emphasis on sustainability. Danish Crown has already taken a significant step by investing nearly DKK 1 billion in a new, state-of-the-art bacon factory near Manchester, UK. The factory's annual production of over 200 million bacon packets has already been sold to three large British customers. However, since 2021, the number of pigs sent for slaughter in Denmark has significantly decreased. This necessitates a faster transition and more streamlined production to ensure competitive pricing for the company's owners, Danish farmers. The goal is to sell the cooperative owners' meat as processed products or export it as semi-finished goods to high-price markets. Jais Valeur noted that the global pork trade has undergone significant changes in recent years, with Spain, the USA, and Brazil now dominating the market for exporting pork for processing. However, he sees potential for processed products, particularly in the European market, which has shown considerable interest in Danish Crown's bacon and pepperoni. Danish Crown is implementing new measures to consolidate its Danish slaughterhouse activities at fewer facilities. This will precisely match the group's capacity to the number of pigs pledged for delivery by the cooperative owners in the coming year. This balance will minimize slaughter costs and increase the value of the pigs. A social plan will be implemented to assist employees affected by the proposed closure of the Ringsted slaughterhouse in mid-September 2024. The production currently taking place in Ringsted will be moved to other Danish Crown facilities in Denmark. The group will invest in Horsens, Herning, Vejen, and Blans near Sønderborg, and it is expected that there will be sufficient work for the Ringsted employees willing to relocate to one of these four other locations.