Danish Crown to close two facilities

by Meat&Poultry Staff
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RANDERS, Denmark – Danish Crown, the parent company of Plumrose USA, announced plans to close two production facilities in Faaborg, Denmark and other initiatives as part of a restructuring of the company's pork-processing operations.

The company's board of directors recommended ending production of ready meals at Tulip Faaborg and closing the deboning department at Danish Crown Faaborg. The company said the current production set-up was not competitive. The two closures will affect approximately 470 workers, according to the company.

In addition to the closures, the Danish Crown board is recommending negotiations with workers and other stakeholders at slaughterhouses in Skaerbaek and Bornholm with the goal of achieving "a more sustainable cost structure". For Danish Crown, this means reducing production by approximately 20,000 pigs per week. The company said it would achieve its goal by reducing the number of pigs slaughtered on the evening shift. Approximately 350 employees will be affected by the capacity adjustments.

“It is no secret that the slaughterhouse on Bornholm has been in our sights for some time because, at the end of the day, each kilogram of meat we produce on the island costs considerably more than elsewhere,” said Jesper Friis, CEO for DC Pork. “However, we are also very aware of the importance of the local workplaces and of ensuring the shortest possible transport times to the slaughterhouse for the animals. Therefore, together with our employees and the politicians, we will look at whether it is possible to find alternative solutions to making production on Bornholm financially sustainable. In so doing, we hope to be able to preserve the slaughterhouse and the workplaces.”

Danish Crown's restructuring initiatives will include adjusting capacity at the group's slaughterhouses. Friis said the company's capacity to slaughter pigs has exceeded the number of animals being delivered to the slaughterhouses. Pork production in Denmark has fallen by more than 20 percent over the past five years, according to the company. The adjustments will impact approximately 350 employees at several production facilities, the company said.

“We have not decided in advance how we will adapt capacity, but we know that about 350 employees will be affected,” Friis said. “Therefore, we are keen to enter into a constructive dialogue on how we can structure production to keep job losses to a minimum. There is a range of options open to us at the factories, which will be discussed with employees in the coming weeks.”

Danish Crown in Faaborg debones hams and produces raw ingredients for sliced back bacon and semi-finished ham products (MetaPress hams). Danish Crown is establishing a job bank to help the 409 employees who will be impacted by the closure. The company plans to close the facility by early 2016, and decide whether to move production to Poland or Germany.

Tulip Faaborg produces refrigerated and frozen ready meals. Danish Crown is gradually transferring production from the facility and plans to close the plant in September. Approximately 70 percent of production in Tulip Faaborg is being transferred to Tulip in Aalborg, where the company is investing approximately DKK 30 million. The remaining production is being distributed between the other facilities. The factory closure at Tulip Faaborg affects 63 employees.
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