Danish Crown unveils cost-saving strategy

Global meat processing company Danish Crown has unveiled its cost-saving measures, including movement of its administrative functions from Denmark to Poland.

Once fully implemented, the transfer is expected to generate annual savings of around kr40m ($6.2m), which will contribute to realising the company’s strategic target.

The company noted that the affected employees in the individual business units will be informed as the decisions to transfer tasks are made.

As part of its cost-cutting strategy, the company has also put the construction of a new head office in Randers on hold until further notice.

The plan to set up a new joint head office for Danish Crown and its subsidiary Tulip Food Company was announced in August last year.

As per the plan, the company intended to transform the former sausage factory in Randers into a modern office building with 23,000m² of floor space.

In 2016, the meat processing company announced its strategy forward and four-wheel drive (4WD), which focused on boosting the price paid for the pigs supplied by its owners by kr0.60 per kilo relative to an EU index.

Going forward, Danish Crown intends to standardise and automate a number of administrative functions in a new Global Business Services centre in Poland, under its 4WD strategy.

As part of the strategy, the company plans to transfer nearly 50 jobs from Randers to Krakow in Poland.

In the same year, Danish Crown set a target to reduce the procuring costs by kr500m ($76m) before the end of the 2020/21 financial year, and this target has been revised and increased to kr650m ($99m).

Danish Crown Group CEO Jais Valeur said: “We continuously review our strategy, and in three specific areas we have decided to strengthen our efforts, as we believe this will benefit the group in both the short and the long term.

“However, these are not easy decisions to make, as it means saying goodbye to a number of employees in different parts of the organisation.

“At the same time, we are postponing the construction of our new head office, which will no doubt be a disappointment for our employees in Randers.”