DC Future

 
Randers, 5 May 2009


At the meeting of the Board of Representatives on 5 May, Danish Crown presented the next step in its plan to strengthen DC’s competitiveness and to tackle the major challenges which the company and its members are facing in the current situation.

The plan focuses on specific initiatives which can be realised in the short term, i.e. within the next 6-18 months.

1. Savings and improvements in the slaughter divisions

The plan, which covers both the pork and beef divisions, includes significant reductions in direct and indirect costs at the slaughterhouses and at head office, improved logistics and purchasing as well as increased ‘flagging-out’ of production.

Preparations have been made so that capacity costs can quickly be adjusted to any changes in the supply of raw materials.


2. Improved earnings in processing companies and other joint companies

Action plans which focus on costs and competitiveness are being launched in all the companies, and will significantly boost the subsidiaries’ combined contributions to DC’s earnings.


3. Savings via joint administration and function sharing in Denmark

Savings and simplification via the setting-up of joint administrative functions and sharing a number of specialist functions across the Danish companies in the group.


4. Cutting investments and production capacity in Denmark

The investment budget in the group’s Danish companies is being cut to an absolute minimum, and two further factories at least will be closed during the period.


5. Establishing pig slaughterhouse capacity in Germany

DC will obtain access to pig slaughterhouse capacity in Germany – focusing on local production and benchmarking as the starting point.


6. Cost cuts for DC’s organisations at Axelborg

Savings through simplifying and streamlining DC’s services at the organisational level.


7. New and market-oriented settlement concept

DC is offering pig producers a new market-based settlement concept which allows optimisation for both large and small suppliers. The aim is to ensure a broader supply of raw materials for the joint business, for the benefit of all members.

8. Reducing Danish payroll costs

Danish pay levels constitute the biggest single challenge on the costs front. A new pay agreement will create the possibility of reducing the Danish unit costs for pay by 20 per cent.


9. Removal of political competitive handicap

Danish Crown is demanding the removal of unreasonable political burdens which threaten the company’s supplies of raw materials and competitiveness.



Combined efforts are necessary

The challenges facing Danish Crown will not be solved through isolated initiatives but via joint efforts in all areas covered by the plan. The plan is therefore one which cannot be fragmented, but where all the parties involved must contribute to achieving the goals which have been set.

The Executive Board and Group Management are primarily focusing on the improvements which can be realised through the company’s own initiatives and collaboration with employees.

At the same time, DC is demanding that existing and new threats to its competitiveness in the Danish slaughter and meat production sector are reduced and prevented, and we appeal to our organisations to make renewed efforts within this area.



Combined effect of the plan

The combined effect of the plan is expected to be DKK 1.3 billion per year. In addition, removal of political burdens will translate into at least DKK 300 million per year.



Read more
Joint plan will ensure competitiveness