Danish Crown pays £28.4m extra to pig farmers
The payment to pig farmers is justified by an unchanged supply of animals and owners of Danish Crown will be paid DKK1.05 (£0.09) per supplied kilogram (kg) of pork.
Making the announcement, the Danish Crown president and CEO Kjeld Johannesen said: "We are working hard to ensure it pays to be a cooperative member of Danish Crown. At the least, we must be competitive in terms of the prices we pay for their animals. Therefore it is wonderful that we are able to deliver a return that is significantly higher than last year."
Denmark’s financial year concludes on 31 December and Danish Crown will go into 2016 buoyed by revenue figures slightly higher than last year: DKK59.6bn (£5.6bn) against DKK58bn (£5.44bn).
Russia’s import embargo has had a damaging impact on the market; there is surplus of pork in Europe, prices are not “sufficient” and it’s difficult for producers “to generate a profit”, said Johannesen.
'Difficult situation'
He added: "The difficult sales situation on the global market has had a significantly negative impact on the value of pork, and this obviously has a bearing on conditions for pig producers."
Despite the trouble in Russia, Danish Crown posted overall profits of DKK1.8bn (£171.1m).
"[We face] exactly the same challenges as other slaughterhouse and meat processing companies throughout Europe. This is having a significant impact on our owners, and so our delight that Danish Crown is managing better than its European competitors in a very difficult market is slightly muted," said Erik Bredholt, chairman of Danish Crown’s board of directors.
'Strategy for growth'
Bredholt said it was worth noting that Danish Crown is also a "company owned by farmers, which is posting such strong financial results for the benefit of its owners".
And Danish Crown’s excellent financial results for farmers are ascribed to a long-term international strategy for growth.
“For two years we’ve been in an environment where we’ve need to trade globally,” said head of press Jens Hansen.
“Our biggest advantage is our wide market where we trade in 136 countries. The countries that perform better or worse are changing month to month depending on foreign exchange rates, coupled with domestic issues like African swine fever outbreaks.
“Being able to get a high tonnage of meat out of the EU is imperative. We have very strong markets in Asia, Japan and China, and they are the backbone to our international growth.”
