Danish Crown is to sell its China facility after reporting a decline in demand for pork in Northern Europe and China.
The Denmark-based pork processing major has put the Pinghu-based factory up for sale, a spokesperson confirmed to Just Food.
The spokesperson declined to comment further, as ”it is a very, very small part of our business, which we have decided to divest as it didn’t develop in line with our expectations”.
The decision was made by Niels Duedahl, who was appointed CEO of the company last August.
Duedahl was an external appointee who replaced previous company head Jais Valeur, who in June announced he was stepping down as chief executive earlier than originally anticipated.
Chairman Asger Krogsgaard said at the time that the business is facing a “new strategy period” and its at the beginning of a “significant transition”.
Access the most comprehensive Company Profiles
on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Company Profile – free
sample
Your download email will arrive shortly
We are confident about the
unique
quality of our Company Profiles. However, we want you to make the most
beneficial
decision for your business, so we offer a free sample that you can download by
submitting the below form
By GlobalData
The moves comes just a few weeks after Danish Crown revealed it has decided to stop selling retail-packed fresh meat in Germany as part of efforts to improve its profitability.
The decision will lead to the winding down of the Oldenburg Convenience division in Oldenburg in north-west Germany by the end of February.
The bacon heavyweight said in its 2023/2024 report that it was a year of “significant market and geopolitical changes” that impacted Danish Crown’s operations.
It said that in the financial year 2024/25, it expects “to see a continued decrease in slaughter animal production across Europe”.
“The pace of the decline slowed in 2023/24, but the downward trend remains challenging. These shifts in production may impact our supply chain and pricing strategies,” it said.
It said that “the number of slaughtered animals in Northern Europe has decreased substantially”.
It added: “Contributing factors include a sharp decline in demand for pork in China, the arrival of African Swine Fever (ASF) in Germany and the surge in raw material prices following the outbreak of war in Ukraine. We have also seen a collapse in piglet production in Germany, leading to higher imports of piglets from Denmark, and all this has created a need for consolidation on a scale we have not seen before.
“This has made it extremely difficult to operate our abattoirs efficiently, but we have adjusted our capacity, which unfortunately led to the closure of our abattoirs in Sæby in 2023 and Ringsted in 2024.”
In the meat producer’s financial results in 2024, Danish Crown reported revenue of DKr67.8bn ($9.4bn), which showed stagnation compared to 2023’s DKr67.6bn.
Net profit fell 28.5% from DKr1.4bn in 2023 to DKr1bn in 2024.
In 2020, Danish Crown discontinued a manufacturing and distribution agreement in China with e-commerce giant Alibaba as pork production volumes had fallen short of requirements.
It signed a contract to supply pork to one of China’s largest agri-food enterprises in 2019. Danish Crown said the deal with COFCO Meat Holdings was going to be worth $100m in 2020.
Danish Crown still has facilities in Denmark, Sweden, Germany, the Netherlands, Poland, the UK and France..
