February 21, 2009

Danish Crown to close three pork processing operations

Danish Crown has decided to close three pork processing operations due to uncertain framework for slaughter pig production.

Danish Crown will close the slaughterhouse in Holstebro, the cutting department in Rodding, and the shoulder deboning department in Esbjerg within this year. A total of 861 employees are expected to be affected from the closures.

The decision is influenced due to uncertain framework conditions for primary production, including a lack of environmental approvals, significantly increased veterinary costs, uncertainty surrounding the consequences of the Danish Tax Commission's proposal, the economic downturn and the high cost levels in Denmark. 

However, the company is looking to reopen the Holstebro slaughterhouse within the first year and is monitoring the framework conditions which will define future pig production, according to Danish Crown CEO Kjeld Johannesen.

Recent pig counts suggest a further decrease in slaughter pig production, and the move will help the company to adjust costs in order to remain competitive in the international markets, said Johannesen.

Part of production in Rødding will be transferred to the department in Esbjerg, and from there part of production will be transferred to Germany.