Talks of slaughterhouse closure in Danish Crown/Tican merger
Jens Jørgen Henriksen, Tican’s chairman, described the acquisition deal as a “win-win for both cooperatives” – a view shared by Erik Bredholt, Danish Crown’s chairman at the press conference in Copenhagen on the day the deal was approved.
However, some industry observers are concerned that the consolidation could lead to the closure of Tican’s meat processing plants and smaller-sized slaughtering houses across Denmark.
“My immediate fear is that the merger between Danish Crown and Tican will lead to closures. Specifically, my immediate concern is about Tican’s slaughterhouse in Thisted. Danish Crown has closed smaller slaughterhouses in recent years, so I do not believe that the slaughterhouse in Thisted will exist five years from now,” said Leif Pallesen, a former regional director with the Confederation of Danish Industry (‘Dansk Industri’), which represents the meat sector.
Danish Crown has issued no guarantees over the future operation of Thisted, which employs 650 workers, added Pallesen.
According to Henriksen, Tican’s board has secured a ‘letter of intention’ from Danish Crown that ensures the continuation of slaughterhouse operations in Thisted so long as worker productivity levels are maintained and farm deliveries of pigs to the plant meet the required levels going forward.
“If the plant performs well enough, then I am sure that there will be a slaughterhouse in Thisted in five years. Beyond five years, who can predict the future,” said Henriksen in a statement on 5 April.
Several potentially contentious issues that stood in the way of the takeover included the matter of how best to ensure that Tican’s owners will attain equal footing with Danish Crown’s cooperative members. This issue was set aside and will be resolved in the next two years, according to Danish Crown. The key focus will be to address and resolve the differences in equity and earnings between owners in the two cooperatives.
Tican has 2,200 employees. In 2013-2014, it had revenues of Danish Krone DKK 5.20 billion (US$751.03 million) and slaughtered 1.9 million pigs. Tican operates meat processing subsidiaries in Denmark, Britain and Poland. By contrast, Danish Crown had revenues of DKK 58 billion (US$8.37 billion) in 2013-2014 and employs 26,000 personnel. The group slaughtered 22 million pigs at plants in Denmark, Germany, Poland, Britain and Sweden in 2013-2014.