Danish Crown sets out China construction schedule
The factory is less than 100kms from Shanghai and is 17,000 square meters. It is expected to produce 14,000 tonnes of processed products annually, catering largely to the over 25 million people living in region.
The plant will manufacture chops, bacon and sausages, with all commodities coming from Denmark.
The company’s aim is to invest in a larger proportion of sales to e-platforms, retailers and foodservice in China.
"It is a significant investment and an important strategic step towards developing Danish Crown's business in China,” said Kasper Lenbroch, CEO of Tulip Food Company and Chairman of Danish Crown China. “There is both a growing demand for high quality products and a growing consumption of meat from Chinese consumers. With our own factory, we will be able to better meet local trends and, in particular, navigate the market rapidly to the actual demand.”
Recently, Danish Crown has been exporting fresh pork and so-called ‘China goods’ such as toes, ears, and tails.
It has also been allowed to export a range of heat-treated products, so when the new factory is ready in the summer of 2019, the Danish Crown Group aims to have a very strong set up in China.
Sales of meat to Chinese consumers continue to be extensively on so-called wet markets, where the pig is sold cut into relatively large pieces that the consumer can see and feel. However, the consumption pattern in China is changing rapidly.
Group CEO of Danish Crown Jais Valeur added: “There really are three things: One is that much of the consumption moves into foodservice or in restaurants, as it does in the United States or Europe. The other thing we see is a huge growth in e-commerce, where you buy the goods and get them delivered at home. It grows enormously in China, and cities like, for example, Shanghai have today the world's most advanced e-commerce market. The third trend is that consumers in supermarkets also start to buy retail-packed products, as we know it in Denmark.
"We are far closer to the Chinese market, closer to consumers and beyond into the value chain in China - instead of just being a commodity supplier, and I see a significant potential.”
