News article, 27. November 2023

Danish Crown will make adjustments and focus on processing

The market for Danish pigs has changed rapidly. In order to increase its competitive power, Danish Crown will implement an action programme to reduce costs.

Photo: Danish Agriculture & Food Council

The market for Danish pigs has changed rapidly. In order to increase its competitive power, Danish Crown will, for example, implement an action programme to reduce costs and at the same time focus on marketing bacon in Great Britain and on entering the Californian market that has now introduced requirements for higher animal welfare.

Changes in German pigswill affect Danish Crown. A lower supply of fattening pigs has increased the German prices for pigs and the German pig-breeders have paid well for Danish piglets. This means that at present, a higher number of piglets are exported than the number slaughtered in Denmark.

This development entails that the company has had to adjust its production capacity. For example, the abattoir in Sæby was closed in June where about two million pigs were slaughtered last year. Further measures are to result in savings of DKK 1.5 billion in 2023 and 2024.

The recipe for increasing earnings is to develop the company and increase the percentage of processed goods. The majority of sales today consist of meat ingredients, and processed products today amount to only 19 per cent. Jais Valeurs used to be at Arla and here the processing degree is 80 per cent. It is his assessment that the possibility of moving upwards in the value chain lies with the customers and the markets where Danish Crown is already highly represented.

One example is Danish Crown’s investment in a new production facility in Great Britain for processing of Danish pork belly into bacon. Great Britain is by far the biggest market in Europe for bacon and it has great growth potential.

California is another growth potential since the state recently introduced stricter rules for animal welfare.