Danish Crown sustained by demand from Asia

By Rod Addy contact

- Last updated on GMT

Prices Danish Crown paid to members for pigs were down on last year
Prices Danish Crown paid to members for pigs were down on last year

Related tags: Danish crown, Denmark, European union, Uk, Pork

Demand from Asia sustained Danish Crown’s sales in the face of greater challenges in its UK market in the past year, according to chief executive Jais Valeur.

Reporting on full-year results, Valeur said: “The Chinese appetite for imported pork was exactly what was needed to lift prices in Europe. This was obviously positive for Danish Crown’s sales, but what pleases me most is the fact that the higher prices have led to renewed optimism among the company’s owners.”

Payments to members for pigs and cattle were down on last year, said chairman of the board of directors Erik Bredholt, but he said the company had faced special challenges. “The prices we are paying are still above those being paid in Germany and are also above the new European index which we introduced in connection with the new strategy plan.

“Because of the challenges faced by the group in the UK market, the price difference between Denmark and Germany is slightly smaller than last year, with reference to the fact that UK subsidiary Tulip Ltd has experienced significant losses of competitiveness and earnings, resulting in a change of leadership and structure.”

'Challenges'

Valeur warned the next financial year would continue to present challenges for the company. “As a supplier to the highly competitive retail business, raising prices to reflect rising raw materials prices is hard. At the same time, we are still facing challenges in our UK subsidiary.”

Valeur launched Danish Crown’s comprehensive five-year ‘4WD’ strategy plan earlier this month. The plan includes a promise that, by the end of the strategy period, the settlement paid to owners will be DKK 0.60 higher than the EU pig price index.

However, the company reported that the past year had provided a “robust financial foundation”​ for further development.

2015/16 pre-tax profit declined slightly from DKK 3.98m to DKK 3.62m. However, sales rose from DKK 59.6m to DKK 60m.

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