Danish Crown drives forward to target northern Europe
The plan should be read as both ‘Forward’ and ‘Four-wheel Drive’, according to the company, which claims to be the world’s biggest pork exporter.
“It is a bold strategy that sets out to make a strong company even stronger – hence Forward,” said group CEO Jais Valeur. “4WD stems from a desire to change Danish Crown from what I would call a solid, rear-wheel drive estate – which drives extremely well on asphalted roads – into a four-wheel drive, all-terrain vehicle that moves in exactly the direction we want it to in our efforts to make it the preferred business partner for our customers.
“In other words, the aim is to make the Danish Crown Group so strong that we can always choose the direction that best serves our owners and customers without having to pay too much attention to the road conditions or the prevailing traditions.”
Last week, Danish Crown announced that the plan included a commitment to its owners to pay a settlement price in 2021 that was DKK0.60 higher than a weighted average of the settlement prices paid to farmers in Germany, Spain, France and the Netherlands. It has now filled in further details of the strategy.
These include focusing on shoring up its strength in its four core home markets of Denmark, Sweden, the UK and Poland, which would make it market leader in Europe.
Other aims are to invest in innovation to strengthen its retail, foodservice and ready-meals business and establish global product categories based on product groups with global sales potential.
Danish Crown also intends to focus on boosting the value of the group’s raw materials, including organic products, pigs raised without the use of antibiotics and local speciality products.
It said it wanted its business units to work more closely together, so that valuable knowledge was shared across the group. It also plans to make operations more streamlined and efficient, for example through the joint procurement of everything except meat under a group purchasing manager. Detailed plans have been prepared for the individual business units since the start of the year, it said.
“I am extremely proud of our strategy, and my expectations are high,” said Valeur. “The keywords for the next five years are focus, value creation and growth.”
“With this plan, I am promising our owners that, at the end of the strategy period, they will own a company which is more valuable, which has higher sales, and which is more profitable, which can afford to make the relevant investments and, not least, which will pay higher prices for its raw materials than competing countries.
“Our target is a return on invested capital in excess of 10%. Believe me, the owners will hold me to this promise. However, if you have a four-wheel drive vehicle, then you can go where you want. So it’s just a question of getting going.”