Danish Crown is halting some investments
The 4WD strategy presented two years ago by Danish Food must adapt to the reality of lower pig prices, announced Group CEO Jais Valeur.
At the end of 2016, Danish Crown mentioned the company's intention of boosting the price paid for the pigs supplied by its owners by 0.60 DKK per kg relative to an EU index. Now, the reality in the market is forcing the company to review some of its plans.
"We continuously review our strategy, and in three specific areas, we have decided to strengthen our efforts as we believe this will benefit the group in both the short and the long term. However, these are not easy decisions to make as it means saying goodbye to a number of employees in different parts of the organisation. At the same time, we are postponing the construction of our new head office, which will no doubt be a disappointment for our employees in Randers", said Valeur.
The plans for a new joint head office for Danish Crown and Tulip Food Company were announced a year ago. The idea was to transform the former sausage factory in Randers into a modern office building with 23,000 square metres of floor space, but these plans are now being put on hold.
"The situation is that the difference between the cost of producing a pig and the price at which it can be sold is being pressured by the low pig prices. As a result, we do not feel that this is the right time to go ahead with this project. Having Danish Crown and Tulip Food Company move in together still makes a lot of sense, but it will not happen at the beginning of 2020 as originally planned" added Jais Valeur.
As part of the 4WD strategy, Danish Crown will in the coming years bring together, standardise, and automate a number of administrative functions in a new Global Business Services centre in Poland. The first step is the transfer of approximately 50 jobs from Randers to Krakow in Poland.
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