Danish Crown continues transformation and closes Chinese factory
Danish Crown has decided to close the factory in Pinghu and has informed customers in China about this. Employees in production, sales and marketing have also been informed of the decision, which means that all employees have been made redundant. In total, 112 jobs will be cut.
The factory in Pinghu outside Shanghai opened in 2019 as part of Danish Crown's ambitions to expand its business in China. However, it has never succeeded in generating the expected earnings, even though significant efforts have been made during the period to rectify a poor start.
Danish Crown's new management decided in the autumn to conduct a review of the activities and opportunities for the factory in Pinghu. The conclusion of this review was that a sale or closure of the factory is the best option for Danish Crown.
"It is sad to say goodbye to the employees who have fought all the way to make the factory a good business, but after our review it was clear that the activities in Pinghu do not fit into our strategic direction. We would prefer to sell the factory, and we have signed a letter of intent and agreed on the terms of a divestiture. The process is progressing according to plan, so we expect it will be a few months before we can close a final deal", says Anders Aakær Jensen, CFO of Danish Crown.
"Our strategic review showed that we were effectively faced with two options; either to sell the factory or to close it and move the equipment from there to our factories in Europe. It was therefore no longer a realistic option to continue with the current setup in Pinghu. Therefore, we have decided to shut down the activities there while we work on a final clarification of the factory's future".
Danish Crown expects clarification regarding the factory's future before summer.
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