West Crown creates competition in Germany

By Poorna Rodrigo

- Last updated on GMT

Tönnies has signed an agreement with Serbia to build five pig farms worth €5m
Tönnies has signed an agreement with Serbia to build five pig farms worth €5m

Related tags Danish crown Denmark Meat Beef Pork

A new European meat joint venture involving Denmark’s leading beef and pork processor Danish Crown and Germany’s Westfleisch aims to be a tough competitor to German’s current market leader Tönnies GmbH & Co, Danish Crown’s head of press has said. 

Speaking about the new company, West Crown, a spokesman said: “Westfleisch is a big player in the meat industry, although it is not currently number one in Germany. But together we can compete better.​”
Danish Crown and Westfleisch have now secured competition approval from the European Commission to push ahead with the plan and the joint venture will be owned in equal shares by the two companies, a statement from Danish Crown has explained.

Synergy between the two firms will help: “Danish Crown, a cooperative owned by nearly 8,300 Danish farmers, is one of the top three meat exporters worldwide,” a statement from Danish Crown said. It also noted: “Westfleisch in Germany is one of the top five meat suppliers in Europe and its members and owners comprise more than 4,200 farmers in the north-west of Germany."

€5m pig farm 

The new company will need to work hard to compete with Tönnies, which is a multi-tier food industry business with strengths in the meat, convenience, ingredients and logistics sectors.

Tönnies specialises in slaughtering, butchering and processing pigs, sows and beef cattle in its eight German and one Danish production facilities. It has 25 international offices and, in April this year, it further broadened its international presence, signing a memorandum of understanding with the Serbian government to set up five new pig farms for €5 million, with a combined capacity of 3 million pigs.

West Crown will be based in Dissen, south of Osnabrück, north-west Germany, and will specialise in deboning and selling sow meat. The new venture has expanded Danish Crown’s services into the deboning segment. Kjeld Johannesen, president and group CEO of Danish Crown, said in a statement: “By investing in our own deboning facilities, we hope to secure better prices for our owners. More specifically, we are removing an intermediary step, which will improve earnings for our owners."

'A big win' 

Johannesen, who steps down next April (2016), added that the company would now focus on starting up production, “which will hopefully be operational in early 2016”. Danish Crown slaughters nearly 325,000 sows in Denmark each year, but so far, these sows have been sold as half-carcases to buyers primarily in Germany.

Currently, “Westfleisch operates a specialist sow deboning business in Schöppingen near the Dutch border with an ultimate processing capacity of 355,000 animals per year,” said a Danish Crown note.
Christian Leding, a spokesman for the Westfleisch SCE executive board, said he was looking forward to seeing the partnership develop, calling it “a big win for both companies” to join forces in the sales and deboning of sows. “We are ready to relocate our production from Schöppingen to the new premises in Dissen… We expect it will be a highly valuable step to have a joint organisation for sales and marketing and we can hardly wait to get going,” he added.

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