June 4, 2008

Danish Crown to shed 900 jobs due to poor operating environment

Danish Crown is to shed 900 jobs due to a poor economic environment and environmental approvals not granted by government authorities.

The supervisory board of Danish Crown proposed Monday morning closure of two factories and adjustment of capacity at another factory. The factories to be closed at the end of August are Vojens and the deboning department in Nykobing together with a 40 percent reduction of capacity at the slaughterhouse in Holstebro.

Kjeld Johannesen, CEO of Danish Crown, said it was a difficult decision to make.

The decision about closing the slaughterhouses comes after the latest pig count of April. The missing environmental approvals mean that closed pig productions are not as easily taken over by new farmers as they used to, due to waiting time of up to three years for environmental approvals.

During the last weeks Danish Crown has operated with a capacity of only 80 percent utilization and this is not sustainable, Johannesen said.

The company had foreseen a decline in the slaughterings but new figures show a much faster and more drastic decline than expected.

Prognoses call attention to the fact that pig production will rise again by the end of 2009 and Danish Crown has ensured the possibility of increasing capacity again, if necessary.