Annual Report 2008/09

| It’s all about food Annual Report 2008/09

a new dawn The world’s most modern slaughterhouse early one morning in January 2009. Just be­ fore daybreak. Just before the first pigs ar­ rive to be slaughtered. The supply of pigs

is the foundation for Danish Crown’s activ­ ities, and therefore competitive prices for the company’s owners are absolutely essential.

This is the overall goal of an ambitious plan,

DC Future, which was launched in the previ­ ous financial year. And this year’s results re­ flect the fact that we are coming to the end of a long, dark night. |

Contents

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14| INTERNATIONAL 24| Debate

A hugely challenging year.

But also one which shows that Danish Crown is able to make the necessary deci­ sions. A year with DC Fu­ ture. |

Together with processing, a number of Danish Crown’s foreign subsidiaries in par­ ticular have contributed to the reasonable results for the year. |

Willingness to change

Danish Crown all over the world

A cooperative with values

One of the elements in DC Future is the new settlement scheme. Throughout the year, the DC Settlement System has been a topic for lively debate among members. |

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business

Every day, almost 10,000 people go to work in Dan­ ish Crown’s departments in Denmark. Here too the focus has been on cutting costs. |

Danish Crown’s products are eaten throughout the world.

To an increasing extent, in­ spiration comes from col­ laborating with skilled chefs and gourmet butchers. |

DC Future has demanded huge efforts throughout the year. This is clearly reflected in the year’s results. The improvement in earnings in the processing com­ panies is especially noticeable. |

The global workplace

Bringing DC quality home

Section 2

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HOME

Willingness to change The high Danish cost level poses a

massive challenge for an international export-based company in Denmark. In 2009, this has resulted in the ambitious plan, DC Future.

DC – also in future It has been a long dark win­ ter’s night in the history of Danish pig production, but at the end of the financial year the beginning of a new dawn can be discerned on the hori­ zon. The ambitious strategy we presented and which in the spring became known as DC Future is evident in the results for the year.

The strategic work was already well underway by early spring 2009. The task was simple to put into words, but the chal­ lenge was massive. Danish Crown had to re-establish its competitiveness as quickly as possible. The company had to ensure a sustainable settle­ ment for owners, and in this way secure workplaces – and the future of one of Europe’s biggest pig slaughterhouses.

Before had gone two years of difficult economies for pig production in many parts of the world, and a finan­ cial crisis had taken root and stopped the expected and

Publisher

Marsvej 43 DK-8960 Randers SOE Telephone | +45 8919 1919 dc@danishcrown.dk www.danishcrown.dk

necessary price increases in the global pork trade. Today, Denmark has lost its com­ petitive edge, the main rea­ son being that costs in Den­ mark have in recent years grown significantly, and far more so than in the coun­ tries with which we compete.

Since 2002 alone, pay levels in Denmark have increased by 25 per cent, while in Ger­ many they have dropped by 5 per cent.

Danish Crown slaughters ap­ prox. 20 million pigs a year.

This is far more pork than Danish consumers can eat, and over the years we have become specialists at ex­ porting our products. More than 90 per cent of Danish Crown’s production is con­ sumed by consumers outside Denmark, which means that we must sell products in the same markets as slaughter­ houses and food producers in other countries.

Today, Danish Crown is a strong player as an export company. In a number of markets – and in a number of countries – consumers are willing to pay more for meat which comes from Danish Crown. However, every time it costs DKK 100 to perform a task in Denmark, it costs only DKK 44 to have it done in Ger­ many. And even though we enjoy a strong position in the high-price markets, the high­ er prices do not compensate for the increased costs stem­ ming among other things from Danish pay levels.

So, after several years of very strong economic growth, at the beginning of the year we faced having to cut costs to ensure a higher settlement price for the company’s own­ ers. The production of pigs for slaughter in Denmark was falling, and over the past two years this has meant say­ ing goodbye to almost 3,000

employees and ten depart­ ments as part of adapting capacity.

In May, we gave ourselves 18 months to improve the com­ pany’s competitiveness and earnings by DKK 1.6 billion altogether through focusing on nine different points.

In early September, we were able to report to the Board of Representatives that we were either on track or ahead of plan with regard to all the points under our control, and at the end of the financial year we have a budget for the coming year which – apart from planned payroll cost cuts currently being negoti­ ated – lives up to the plan.

2008/09 has been a hugely challenging year in Danish Crown. However, it has al­ so been a year which shows that we have what it takes to make any changes called for. |

Kjeld Johannesen | CEO

Niels Mikkelsen | Chairman of the Board of Directors

Danish Crown

Danish Crown

Editors

Editors

Photography

DESIGN AND PRODUCTION

Printing

Editor-in-chief Anne Villemoes Director of Corporate Communications

Simone Bodholdt Frank B. Winther Lisbeth Carøe Jan Fønss Bach Rune Jungberg Madsen Thilde Danielsen Larsen Kirsten Meisner Birgitte Bahat Michael Borgen

Cphotography Per Gudmann and others

CZOO

Arco Grafisk A/S

Willingness to change

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- We have a joint task and a shared responsibility. And we can only see the task through if we believe in it. Reducing Danish Crown’s payroll costs by 20 per cent per kilogramme represents a huge challenge. But we have come a quarter of the way, and I feel confident we can achieve our goal with the rest. You have to think what the alternative is. This was one of the messages delivered by CEO Kjeld Johannesen at a total of 36 departmental debate meetings held following the launch of DC Future.

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DC Future DANISH CROWN CUTTING COSTS

IS THE FINANCIAL CRISIS HITTING DANISH CROWN? 17 Oct 2008 While the financial crisis is ravaging global stock mar­ kets and leaving its mark on household finances, many members are asking whether the financial crisis is hitting Danish Crown. Recently, one of the company’s owners was asked by his bank if he could be certain of being paid by the company. Here, CEO Kjeld Johannesen explains how the financial crisis is af­ fecting Danish Crown.

Can Danish Crown pay its members?

It is crucial in this situation that we are a cooperative so­ ciety and not a public lim­ ited company dependent on stock market prices. Look­ ing at some of the large list­

ed slaughterhouse com­panies that have seen their stock value plunge, I am delighted that Danish Crown is a strong and robust company with a strong ownership structure which, together with our fi­ nancing strategy, means that we have a solid business. We control the entire value chain, and this means security and stability because of this ro­ bustness.

Can Danish Crown’s customers pay their bills?

We are in close dialogue with all our customers and keep­ ing a close eye on market trends. Within the past week, one of our biggest customers has chosen to strengthen its strategic collaboration with Danish Crown – precisely be­

cause of our stability and re­ silience. We produce food – which is not something that you stop consuming. The fact of the matter is that everyone needs to eat, but not neces­ sarily tenderloin every day – fortunately we sell the full range.

How is the financial crisis influencing Danish Crown’s financing?

If anything, the financial cri­ sis has shown us that we have a very robust finan­ cing strategy which I am both very satisfied with and proud of. In recent years, we have ensured the necessary refinancing. Therefore we have not had to renew any of our loan agreements on this occasion. |

October November

7 Nov 2008 High meat production costs are forcing Danish Crown to shift the deboning of foreends in Skærbæk primarily to other Danish Crown facilities in Germany. This means that the deboning facility in Skær­ bæk will be closed, a step which will come to affect 50 employees.

- It’s a tricky situation, espe­ cially for the many affected

December

employees. But the will to make the necessary decisions is crucial to ensuring the company’s future competi­ tiveness in the market – and in the long term to preserv­ ing Danish workplaces, says Morten Petersen, Managing Director of the Pork Division.

The sow slaughterhouse and other functions in Skærbæk are being preserved. The clos­ure takes effect from 30 January 2009. |

January

CAPACITY CUTS IN DANISH CROWN 17 Feb 2009 This morning, Danish Crown’s Pork Producer Com­ mittee has announced that some of the Group’s Dan­ ish activities will be closed.

The announcement involves the slaughterhouse in Hol­ stebro and the cutting facil­ ity in Rødding. The clos­ures will affect 463 DC employees in Holstebro and 308 DC em­ ployees in Rødding. It also affects 90 employees in Es­ bjerg in the shoulder debon­ ing department, which is ex­ pected to be closed in the first

conditions for producing

week of May. Holstebro is ex­ pected to close in the second week of June, and Rødding in the course of 2009.

pigs for slaughter is be-

Lack of raw materials

Uncertainty about the

hind the decision to close several of Danish Crown’s facilities.

There are a number of factors behind the closures, among others the falling volume of raw materials being sup­ plied to the slaughterhouse.

Uncertain framework condi­ tions for primary production and the company – including a lack of environmental ap­ provals, significantly higher veterinary costs and uncer­ tainty about the Danish Tax Commission’s proposals –

create, together with the eco­ nomic slowdown and high Danish cost levels, a need to adjust capacity in Danish Crown.

- We are still hoping for im­ proved market conditions and a willingness to head off the politically created challenges, and therefore we have initially decided to close Holstebro with the op­ tion of reopening the slaugh­ terhouse within the first year.

This is the only economically responsible thing we can do, says Danish Crown’s CEO, Kjeld Johannesen.

Preserving workplaces

The latest pig count at the be­ ginning of 2009 indicates a further fall in the production of pigs for slaughter, and the now very uncertain econom­ ic situation is forcing Danish Crown to take the next step to ensure its competitive­ ness. Part of the production in Rødding is being moved to the department in Esbjerg, from where some of the pro­ duction will be ‘flagged out’ to Germany. Thus, Danish Crown expects to be able to preserve about a quarter of the affected workplaces. |

Willingness to change

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> It’s a tricky situation, especially for the affected employees. But the will to make

the necessary decisions is crucial to ensuring the company’s future competitiveness.

Morten Petersen, Managing Director of Danish Crown’s Pork Division.

NO PAY INCREASES AT HEAD OFFICE 10 Mar 2009 In March 2009, the employees at the Danish Crown head of­ fice in Randers were informed of the initial steps set out in DC Future, which include a pay freeze for all employees who normally negotiate their pay every year. Most Danish Crown employees in Den­ mark are paid by the hour and employed under a gener­ al collective agreement. They are covered by a three-year agreement, which this year is resulting in increased costs of

February

March

just over DKK 120 million for Danish Crown.

- We are, of course, going to honour the agreements made – this sort of thing goes both ways. However, we are at the same time looking at cost in­ creases which none of our foreign competitors are fa­ cing, and for this reason pay increases must be balanced by rationalisations and in­ creases in productivity if Danish Crown and thereby jobs are to be safeguarded, says Kjeld Johannesen. |

April

May

Nothing is saCRED

DANISH CROWN GEARING UP FOR THE FUTURE As part of the cost cuts, a number of administrative positions are being cut in both DC and Tulip.

27 Mar 2009 Through a number of meas­ ures, Danish Crown has today taken the next step towards ensuring that the Group will remain a com­ petitive business in future.

More than 50 administrative jobs will be cut in both the Pork Division and the group functions, on top of the ap­ prox. 30 administrative pos­ itions which the Tulip Food Company has cut in recent months.

Considerable savings

- In recent years, Danish Crown’s Danish departments have witnessed huge changes.

We have implemented cost savings totalling DKK 470 million – with the decisions made in the past month alone accounting for savings to the tune of DKK 210 mil­

lion. We have closed down ten Danish departments and laid off 2,600 employees, and the most recent measures are only some of the steps which are needed to cut costs in the company and to be able to present a reliable and com­ petitive budget for 2009/10, says Kjeld Johannesen, CEO of Danish Crown.

More measures

Capacity cuts in the Beef Div­ ision, the establishment of a combined unit under Danish Crown Nordic and moving Friland’s head office to Rand­ ers are some of the elements which, under the heading DC Future, will ensure a re­ duction in costs and thus a honing of competitiveness at one of Europe’s biggest pig slaughterhouses. |

10 Mar 2009 Over the past few weeks, Danish Crown has been re­ viewing the entire group structure to identify measures for ensuring the future com­ petitiveness of the company.

Neither tradition, nor culture or history is regarded as sa­ cred in this review, which is initially focusing on increased synergies between the parent company and subsidiaries. |

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DC Future DC FUTURE: AN OVERALL PLAN 5 May 2009 Massive savings, structural changes and a new settle­ ment concept are the cor­ nerstones of a new pro­ posal from Danish Crown which, over the next six to 18 months, will ensure the Group’s competitiveness and supplies of raw materials.

- At the moment, the biggest threat to the company’s com­ petitiveness is falling sup­ plies of raw materials. The overall plan therefore in­ cludes both massive cost cuts and a new and more up-todate settlement concept for the company’s owners, ex­

May

plains Danish Crown’s CEO, Kjeld Johannesen.

Under the heading DC

Payroll costs

Future, Danish Crown is

The plan also includes a marked call for action on the part of politicians as well as setting out requirements in terms of developments in Danish payroll costs.

- The very high payroll costs is a decisive factor when it comes to our competitive­ ness as an international busi­ ness in Denmark. It is there­ fore absolutely essential that together with our employees we reduce payroll costs by 20 per cent. This will require a fresh approach on the part of both parties, says Kjeld Jo­ hannesen.

presenting an overall plan for the Group to ensure its competitiveness.

June

Call to politicians

With the overall plan, Dan­ ish Crown is also sending a clear signal to politicians that framework conditions need to be changed if heavy export businesses such as food pro­ duction companies are to re­ main in Denmark.

- The latest pig count means that, within the next few weeks, we will once again be announcing job losses in Denmark. This is not a ten­ able situation, and this is what we are now trying to turn round through huge ef­ forts in the company, but it will not happen without eve­ ryone’s support, says Kjeld Johannesen. |

July

August

Stable interim results 4 May 2009 With revenue of DKK 22.7 billion and a net profit of DKK 450 million, the Dan­ ish Crown Group is posting interim results which match expectations.

- All in all, we have realised interim results which exceed the outlook for the first six months.­ However, we are acutely aware of the need for further marked improve­ ments to our competitive­ ness.

We are therefore launching a number of initiatives this week aimed at safeguarding the supply of raw materials, says Kjeld Johannesen. |

TULIP IN SDR. BORUP TO CLOSE 28 Aug 2009 At an extraordinary meet­ ing of the Board of Directors today, Tulip Food Company has decided to close Tulip’s factory in Sdr. Borup near Randers at the end of De­ cember. The employees at the factory were informed at a meeting at 12 noon.

The aim of the closure is to further streamline Tulip’s production and is part of the action plan launched by Dan­ ish Crown earlier this year.

One of Tulip’s seven factories in Denmark is now being closed to streamline the company.

Even back then, it became clear that it would be nec­ essary to close one or two plants in Denmark, includ­ ing the Tulip factory in Sdr. Borup. The closure will affect about 170 employees.

Fierce competition

- Competition in the food in­ dustry is extremely tough and demands the effective utilisation of all the com­ pany’s assets. Today, Tulip has ten factories, including four that produce sausages

and cold cuts. This is too many if we are to ensure optimum capacity utilisa­ tion. Which is why we have decided to close the fac­ tory in Sdr. Borup, says Tu­ lip’s CEO, Flemming N. Enevoldsen.

Production from the fac­tory in Sdr. Borup will be div­ ided between Tulip’s other factor­ies. After the closure, Tulip will have nine factor­ ies in all. Six in Denmark, two in Germany and one in Sweden. |

Willingness to change

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> The very high payroll costs is a decisive factor when it comes to our competitiveness as an international business in Denmark. Kjeld Johannesen, CEO.

Board of Directors approves budget 29 Sep 2009

Board of Directors and Board of Representatives showing the way 8 Sep 2009

At its annual budget meet­ ing, Danish Crown’s Board of Directors approves – and ac­ knowledges – the budget for the coming year. The approv­ al is dependent on the budget following DC Future. |

At the meeting of the Board of Representatives in Vejle, it was decided to reduce the remuneration paid to both the Board of Representatives and the Board of Directors by 10 per cent. The decision was unanimous, and natural­ ly ties in with the extensive calls for cost cuts throughout the Group. |

DC Future – barometer DC Future is a nine-point plan designed to improve earnings and competitiveness to the tune of DKK 1.6 billion. Danish Crown is following up on the results, and this is the status at the end of the financial year for the points which are directly quantifiable. At the end of the financial year dialogue is taking place with politicians, as well as intense negotiations on cutting payroll costs.

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Improved earnings in processing companies and other joint companies

Savings via joint administration and function sharing in Denmark

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Cutting investments and production capacity in Denmark

Establishing pig slaughterhouse capacity in Germany

Cost cuts for DC’s organisations at Axelborg

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9

New and market-oriented settlement concept

Reducing Danish payroll costs

September

DC Future on target 8 Sep 2009 Danish Crown is on target after the first quarter since the launch of DC Future.

This was explained by the com­pany management at a meeting of the Board of Rep­ resentatives today.

- As regards the first seven points of the plan, we are either on target or ahead of target, and this shows quite clearly how seriously we are tackling this. The last two items require collabor­ ation with both employees and politicians, and we are seeing a lot of goodwill and constructive dialogue among these parties, says CEO Kjeld Johannesen.

- We are working with a timeframe of six to 18 months be­ cause it sometimes takes a while before decisions fully impact the bottom line. For example, it is only now that we are beginning to see the effects of the many redun­ dancies among our salaried employees earlier in the year; also the closure of facilities and new partnership agree­ ments take time to translate into financial gains. But what we can safely say is that we are on track, says Kjeld Jo­ hannesen.

In the coming year, DC Fu­ ture will continue to direct the decisions made by the Group. |

Savings and improvements in the slaughter divisions

Removal of political handicap

8 | HOME | Willingness to change Frida the Happy Pig comes along when Danish Crown is out meeting consumers. Here at Denmark’s Most Beautiful Pigsty which attracted considerable media coverage in early August as part of Denmark’s Most Beautiful Festival in Skanderborg.

Danish Crown – an attractive playmate A company’s reputation is decisive for its impact – both politically, in the press and in the cold counter. In just four years, Danish Crown has developed into a company with which other enterprises want to do business. This has been achieved through openness and a number of measures intended to enhance communication with the world at large. Reputation is also closely linked to the level of motivation among employees.

Willingness to change

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This was the third year running that Danish Crown had organised a unique organic brunch in the form of Denmark’s most beautiful bacon bar at the Skanderborg Festival. Even the long queues and a huge choice didn’t deter the festival guests. In 2009, the choice was even greater with tasty barbecued meat every afternoon, prepared by some of the gourmet butchers with whom Danish Crown often collaborates.

Even though sales in the bacon bar were double what they were last year, the event is intended as one of the many corporate branding activities designed to improve dialogue with the outside world. This year, the DC camp was occupied by a couple of newly-weds who had been invited by Danish Crown to honeymoon in the Pigsty, leading to massive media coverage.

Reliable communication from Danish Crown 23 Apr 2009 Danish Crown still enjoys a strong position in the an­ nual image surveys con­ ducted by the trade maga­ zine Levnedsmiddelbladet among companies in the Danish food sector. In the

image survey, Levnedsmid­ delbladet takes the pulse of the companies’ efforts in a number of areas, and there is progress for Danish Crown in several categories. For ex­ ample, in ‘most reliable com­ munication’, DC moves from fifth place up to second place.

Levnedsmiddelbladet’s image analysis

In the category ‘most envir­ onmentally conscious’, DC leaps from seventh to third place. For ‘high business eth­ ics’, DC moves from sixth to third. And on the manage­ ment front, DC shifts up a notch from fourth place last year to third place this year

30 Sep 2009

in the category ‘most compe­ tent management’. Like last year, Danish Crown’s overall ranking is fifth place in the survey. |

2009

2008

2007

2006

Best image

5

5

7

10

Most reliable communication

2

5

5

-

Most environmentally conscious

3

7

-

-

Best at product development

5

2

8

-

High business ethics

3

6

7

-

Most competent management

3

4

5

5

Winners on quality

7

3

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-

The financial publication Berlingske Nyhedsmagasin has just published this year’s PR Barometer, in which Dan­ ish Crown’s Communica­ tion Department was ranked second. The survey involves Danish companies being scrutinised by 233 journal­ ists. They were asked to as­ sess the companies accord­ ing to 24 parameters on a scale from one to ten. Dan­ ish Crown’s Communication Department scored 7.8 – sur­ passed only by Novozymes with a score of 7.9.

The PR Barometer covered three areas: Communication department, senior manage­ ment and corporate image. In all these areas Danish Crown is above the market average, and in the overall assessment of the company’s reputation was ranked sixth.

Likewise, the results from Media Accounts 2009, which

are published by IFKA, al­ so make interesting reading.

About 100 Danish journalists have given their views on the media relations of Dan­ ish businesses, organisations and authorities. Here, our Dir­ector of Corporate Com­ munications was ranked third.

- When measuring job satis­ faction in the company, its reputation has a significant and measurable influence on motivation and commitment, and in this way our growing reputation is closely connect­ ed with the bottom line, says CEO Kjeld Johannesen. |

Every year, the trade magazine Levnedsmiddelbladet rates Danish food producers against seven parameters. Over the past four years, Danish Crown has been ranked increasingly higher.

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Processing strategy paying off

Danish Crown’s value chain stretches all the way from field to fridge. Literally. From the grain growing in the Danish fields and being harvested to feed the pigs – to the liver pâté being served at the lunch table. In recent years, Danish Crown has developed from primarily being a slaughterhouse business selling sides of pigs to processing companies to performing much of the processing itself in various subsidiaries. And this is the right strategy.

Not that many years ago, Danish Crown was primarily engaged in bulk production.

In the meantime, high Dan­ ish costs have made it hard to make money in the ex­ port markets for products which have little to distin­ guish them from one country to another. Here, competitors in countries such as Germany and Poland have a clear lead because wages and a number of other costs are significant­ ly below Danish levels.

Even though Danish meat is known for its high qual­ ity worldwide, some of the product value is added at the very end of the value chain where the product acquires the characteristics which are appreciated by consumers.

In the past nine years there­ fore, Danish Crown has pur­ sued a so-called processing strategy. The aim of the strat­ egy is for the company to optimise the value chain by processing more of its own raw materials. Danish Crown has acquired a number of processing activities abroad to support market access for customers in the local mar­ kets. In this way, the com­ pany reaps the benefits of the entire value chain in produc­ tion.

Market leader in the UK

Today, the Danish Crown Group produces processed

The aim of the process­ing strategy is for the company to optimise the value chain by processing more of its own raw materials. The strategy has proved viable by making a measurable contribution to the supplementary payments paid to DC members.

products in Denmark, Ger­ many, the UK, the USA, Pol­ and and Sweden. It is a strat­ egy which has proved right this year.

- Our strategy plan sets out a specific and ambitious tar­ get for how much the joint subsidiaries are to contribute to the supplementary pay­ ments. We will be exceeding this target this year and are expecting continued growth, says CFO Preben Sunke. He continues: - The companies are begin­ ning to approach or achieve the ongoing returns targets.

This is most evident in the UK but we are also on track in the other markets, and all the companies are doing bet­ ter. Developments have been extremely positive in the UK. Here Tulip Ltd has built up a strong market position for it­ self with an extensive assort­ ment and satisfactory earn­ ings.

Things are also looking up in the USA, and Plumrose USA is close to achieving the re­ turns target.

- This represents almost a doubling relative to 2007/08 and can be attributed to an increase in both sales and earnings in a year which has otherwise been heavily im­ pacted by the financial crisis, also in the USA, says Preben Sunke.

Tulip on track

The same is true for Tulip Food Company, which is re­ sponsible for the Group’s processing activities in Den­ mark and a number of other markets worldwide.

- Tulip Food Company has returned much improved re­ sults relative to last year. Tu­ lip has adapted its costs strin­ gently and really streamlined its processes, resulting in good earnings and satisfac­ tory market coverage in Den­ mark, says Preben Sunke.

However, Tulip Food Com­ pany still has to contend with some of the drawbacks of having production in Den­ mark in the form of higher production costs, fluctuating exchange rates and greater fluctuations in raw materials prices.

- Nevertheless, big improve­ ments have been achieved, and they look set to continue next year, says Preben Sunke.

More sausages from Poland

In 2005, Danish Crown and the Finnish company HKScan started a joint ven­ ture in Poland which in­ volved the takeover of the Polish company Sokołów.

Sokołów is Poland’s strong­ est brand within meat prod­ ucts and the country’s sec­ ond-largest meat business.

- In Poland we have now

achieved the desired mar­ ket position. This year we have seen a strong improve­ ment in earnings, which is a good starting point for fur­ ther growth, Preben Sunke explains.

More processing across the Sound

The latest additions to the family are in Sweden. In 2008 Danish Crown acquired KLS and Ugglarps, and in 2009 went on to establish one of Europe’s most advanced retail-packaging facilities in Jönköping.

- We are still building up our Swedish activities, but we are on our way to having a signif­ icant market position. Dan­ ish Crown has managed to establish a good foothold in Sweden in a relatively short space of time, and the work will now continue to achieve the targets for earnings and volume, says Preben Sunke, who is looking forward to fresh challenges in the com­ ing year.

- This year the processing strategy has demonstrated its worth, but that doesn’t mean we can rest on our laurels. All the departments are still working hard to meet targets, and right now the prospects for next year look quite promising, says Preben Sunke in conclusion. |

Danish Crown’s CFO Preben Sunke explains that Danish Crown’s processing companies are largely to thank for this year’s supplementary payments to farmers.

Willingness to change

Fired up in Oldenburg but that the Tulip plant is, in fact, a top modern factory with far more facilities than before the fire.

in Oldenburg has been ex­ panded to include top mod­ ern high-speed lines for pro­ ducing cold cuts.

It was just over a year from the fire at the Tulip facility in Oldenburg on 23 May 2008 until the factory had been to­ tally rebuilt in summer 2009.

- Rather than just rebuilding the factory, we decided to look at our entire capacity in Tulip and to rebuild the fac­ tory in a new way and with new facilities. As a result, we now have a factory in Olden­ burg which is both faster and geared for many more activ­ ities than before the fire, says Tulip’s CEO Flemming N. Enevoldsen.

A project which not only means that Tulip in Olden­ burg is now back to normal,

Consequently, in addition to its considerable production of sausages and bacon, Tulip

- We have done two things.

Firstly, we have changed the layout of the lines so there is less shifting of products in the process, and secondly we have decided to equip the factory for modern cold cut production. This is the rea­ son why we can now trans­ fer most of the cold cut pro­ duction to Oldenburg. This improves our production economy without in any way affecting the quality of our products, says Flemming N. Enevoldsen.

Production at the Tulip facility in Oldenburg is nearing full capacity, and product quality is top-class.

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Around Denmark CEO ON PRIME-TIME TV 5 Mar 2009

So even though the fire gave rise to many challenges and certainly wasn’t opportune, he is not afraid to admit that Tulip has tackled the chal­ lenges in the best possible way and is now firing on all cylinders in Oldenburg. |

Tulip in Oldenburg stands stronger after a fire and has expanded its production.

On the weekend of 21-22 February, Danish Crown’s CEO, Kjeld Johannesen, visited the television programme TV2 News to be interviewed for the programme’s financial section. The reason for the interview was the announce­ ment by Danish Crown that the company would be closing three of its departments. However, the interview actually focused on the current crisis in agriculture as a whole, and particularly the conditions for pig producers.

- As a food production company, Danish Crown is not af­ fected by the crisis. But the company is owned by 12,000 farmers, who are experiencing the worst crisis in many, many years. They supply the company with raw mater­ials, and the supply of raw materials is suffering a severe down­ turn. It is costing Danish workplaces – most recently 860 employees, explained Kjeld Johannesen.

In the programme, which was broadcast eight times over the weekend, Kjeld Johannesen sought a clear improve­ ment in the basic conditions for producing pigs for slaugh­ ter in Denmark. |

DANISH Crown LISTENS TO ITS EMPLOYEES 16 Sep 2009 Over the next year or so Danish Crown has to cut costs and improve earnings by as much as DKK 1.6 billion. Accord­ ing to DC Future, just over one third of the cuts must be in the form of pay cuts.

- It is essential that we maintain a close dialogue with our employees in this process. Only last week we held a con­ structive and fruitful meeting with the management of the Food Workers’ Union, NNF. Also last week, extraordinary meetings were called by many of Danish Crown’s liaison bodies where employees are represented, says CEO Kjeld Johannesen.

To ensure that all employees are able to contribute ideas on how to attain the targets set out in DC Future, an email ad­ dress has now been set up to which all employees can send their suggestions directly. |

BLANS THROWS DOWN THE GAUNTLET 31 Mar 2009 At the end of March, Danish Crown’s slaughterhouse in Blans was up to 50,000 pigs a week. Today, full capacity at the plant is 56,000 pigs a week.

- We have a state-of-the-art slaughterhouse where we can continually adjust capacity. The new set-up enables us to vary the cuts because we can, in principle, cut everything at the cutting tables. At the same time, the new generation of automation significantly reduces the number of service assistants in the cutting facility, says Ole Carlsen, Factory Manager at DC Blans.

Rebuilding New Blans has generally followed the main master plan. Only a few months after the fire, a temporary production line was established, ensuring that all the pigs could be slaughtered. |

Masters of processing Carsten Jakobsen Vice CEO, President International Following Tulip Ltd’s acquisition of the companies Hygrade (2003), Flagship (2004) and George Adams (2007), Danish Crown’s processing activities took at big leap forward. Today, Tulip Ltd has 19 departments in the UK and is behind a number of popular brands in the UK market, such as Danepak. The subsidiary is posting very sat­ isfactory results this year.

Flemming N. Enevoldsen CEO, Tulip food company

Morten Petersen returns to Dansk Supermarked

With a number of strong brands such as GØL, Steff Houlberg, Den Grønne Slagter and Tulip, Tulip Food Company is a strong presence on Danish lunch tables. However, the Tulip name is also known by consumers around the world.

Tulip Food Company has seen marked growth in the past year.

23 Jun 2009 After almost a year as Managing Director of the Pork Div­ ision, Morten Petersen decided to accept the job as Director of Groceries Purchasing in Dansk Supermarked, where he was employed until almost two years ago.

- We have now started looking for someone to fill Morten Petersen’s chair, but today there is a competent and expe­ rienced management group in the Pork Division, which means that we are working steadily to achieve the goals contained in the far-reaching plan DC Future, and where a number of changes have already taken effect, says CEO Kjeld Johannesen in connection with Morten Petersen’s resignation in June 2009. |

12 | HOME | Willingness to change

Politicians flocking to the slaughterhouses 25 Aug 2009 Recently there has been an overwhelming level of pol­ itical interest in the Dan­ ish Crown companies. In week 34 at the end of August vari­ous departments were visi­t­­ed by the Danish Min­ ister for Economic and Busi­ ness Affairs, Lene Espersen, the chairman of the Dan­ ish Socialist People’s Party (SF), Villy Søvndal, and the Danish prime minister Lars Løkke Rasmussen.

- The political attention is crucial at the moment be­ cause it is very important that

people, especially members of the Danish parliament, under­stand what is required to preserve Danish work­ places, says Danish Crown’s CEO Kjeld Johannesen.

- We don’t always get the feeling that the politicians understand the link between the political conditions for both the company and the farmers – and the number of Danish workplaces. These visits by politicians are a unique chance to provide them with insight into and an understanding of the in­ dustry.

Politicians are flocking to the slaughterhouses – to see for themselves what the real world is like and to talk to employees.

Sausages for Løkke

In Ringsted, the prime minis­ ter talked with the employees over a round of red sausages.

Lars Løkke Rasmussen indi­ cated that he is well aware how uncertain a time it is for production employees, but at the same time he praised Danish Crown for the efforts which the company is mak­ ing to find new jobs for those made redundant.

Søvndal in Sæby

At exactly the same time, Vil­ ly Søvndal was visiting the DC slaughterhouse in Sæby.

He was shown around the

premises together with union representative Karsten Thomsen, Factory Manager Leif Brøndum Nielsen and Deputy Chairman of Danish Crown’s Board of Directors, Erik Bredholt.

- Politicians need to make the right decisions, and therefore we must ensure that they understand how the cur­ rent conditions for farmers are having a negative impact on the numbers of pigs be­ ing delivered for slaughter.

Conditions which are costing Danish workplaces. How­ ever, it is always a pleas­ ure to meet a politician who

takes a genuine interest in the employees, the company and the company’s owners, says Erik Bredholt.

In the same week, the Min­ ister for Economic and Busi­ ness Affairs, Lene Espersen from the Danish Conserva­ tive Party, visited the slaugh­ terhouse in Horsens, seeing for herself the conditions in the slaughterhouse indus­ try. Earlier in the year the leader of the Danish Social Democrats, Helle Thorn­ ing Schmidt, and the Dan­ ish Minister for Food, Eva Kjer Hansen, also visited the Horsens facility. |

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14|

INTERNATIONAL

Danish Crown all over the world Some of Danish Crown’s international activities in particular are contributing to a reasonable result this year. Focusing on processing and high-price markets has proved right.

For the second year running, Danish Crown’s Danish com­ panies are being closely inspected by US auditors.

A MOMENT OF WONDER Curiosity and collaboration are the secrets behind a new pork chop which has significantly boosted sales in the UK.

20 Aug 2009

which were the focus of Nad­ er Memarian’s inspection.

However, he also took a very close look at cleaning, prod­ uct handling, temperature control in the cutting rooms and condensation in the cold stores.

It all started with a halved butterfly pork chop which proved incredibly popular in the UK. In fact, the chop was so popu­ lar that Jørn Sølvsten, Factory Manager in Hadsund, started to wonder why. Apparently, suppliers of school meals in the UK, which primarily ordered butterfly chops, cut the chops in half to create suitable portions for the schoolchildren. Jørn Sølvsten therefore proposed cutting the chops in half at the factory for the UK customers. The school meal suppliers could then buy an all-ready product weighing 50 grams.

Part of DC’s image

Approved for exports to the USA 22 Jul 2009 - People are making a big ef­ fort at the factories. The em­ ployees should be praised for all their hard work.

This is what Bent Aalund Olsen, head of Danish Crown’s food safety depart­ ment, said after the Ameri­

Danish Crown still approved for exports to the USA. Danish Crown’s head of food safety is more than happy.

cans had inspected six fac­ tories in July. Fåborg, Blans, Skærbæk, Sæby, Esbjerg and Ringsted were inspected and approved, so production for the USA can continue. Earl­ ier in the summer, Tulip in Vejle was also approved. This time, it was the HACCP pro­ gramme and animal welfare

The approvals are very im­ portant for the individual factories but also for Danish Crown’s overall exports.

- It’s part of Danish Crown’s image that we are approved for exports to the USA, and this, of course, is not some­ thing we want to lose. Abso­ lutely all our spare-ribs are shipped to the USA because the Americans pay more than any other country, says Ex­ port Director Carsten Lehr­ mann, and adds: - It also has implications in that other countries attach importance to the approvals.

For example, it is important for our exports to Japan. It’s a rubber-stamping of the com­ pany, and something which only a few other European countries can match. |

Cost-free

In 2008, Hadsund sold 130,000 butterfly chops to the UK. The same year, 130,000 50-gram chops were also sold. So far this year, the factory has sold as many butterfly chops as it did all of last year, and one million 50-gram chops have also already been sold.

- It has all come from wondering about something and listen­ ing to customer needs. Without incurring any costs we have developed a new product and in so doing helped customers.

And this has boosted sales considerably, says Factory Man­ ager Jørn Sølvsten. |

AROUND THE WORLD

Norwegians buying Danish meat in Sweden

Tulip making inroads in Iraq

18 Jun 2009

28 May 2009

The Swedish krona has hit rock bot­ tom, so it is attractive for Norwe­ gian customers to buy their groceries from Swedish shops near the border.

Each year, border trade totals sever­ al billion Swedish kronor, with meat sales accounting for just over half.

The meat comes from, among others, DC in Hadsund, which has seen a significant growth in sales to the bor­ der shops recently. Actually, a sin­ gle border town in Sweden has sold more gyros than Danish Crown sells in Denmark in a whole year. About 95 per cent of customers are Norwe­ gians, who save 40 per cent by shop­ ping in Sweden. |

In Iraq, business is returning to nor­ mal in the more peaceful parts of the country, and here Tulip is seeing growing demand and supplies al­ most 500 Iraqi grocery stores.

- There is already some demand, and

it is important to get a foothold in the market now so that Tulip is a wellknown brand by the time the situa­ tion in Iraq stabilises completely, says Kim Tofteskov Rasmussen in May 2009. He is responsible for sales to the Iraqi importer. |

Danish Crown all over the world

| INTERNATIONAL | 15

WHERE IS THE SHIP BOUND FOR? – RUSSIA! Danish Crown is back in business with the Russians.

4 Feb 2009 Danish Crown’s exports to Russia are growing after the slaughterhouses in Ringsted and Herning were approved for export as of 1 January 2009. The approval has sig­ nificantly increased Danish Crown’s export potential.

- We can sense that Russian customers are waking up after the public holidays and church festivals, and a new ship is therefore on its way which will be unloaded in week 7, says Export Manager Jens Rahbek, who is respons­ ible for the Russian market.

Individual cuts are a favour­ ite with Russians including necks, spare-ribs, shoulders, hams and whole fore-ends.

- We have made the most of the opportunities which have opened up as the Russians have distributed their quotas and licences. And we have been able to strike some good deals, says Jens Rahbek. |

Bacon ‘down under’

Steaks to the Balkans

30 Apr 2009

12 May 2009

In the past year, Danish Crown has increased exports to the attractive Australian market where domestic production has fallen by up to a third, primarily due to increasing feed prices as a result of severe drought. This has forced many Australian farmers

to stop producing pork, and opened up an interesting market for foreign slaughterhouses. Food safety stand­ ards are high in Australia, and Dan­ ish Crown’s high food hygiene stand­ ards therefore put the company at an advantage. |

Danish Crown’s Beef Division has in­ creased exports to several new Bal­ kan countries after the Russian mar­ ket was unable in the autumn to receive the same volumes as previ­ ously. One of the countries which has developed a liking for Danish beef

is Croatia which, after a three-year period of declining sales, is now show­ ing satisfactory sales again. Danish Crown is always working to develop new markets, and Bosnia Herzegov­ ina and the Ukraine are proving ex­ citing possibilities. At the moment the Beef Division is awaiting the final vet­ erinary approval which is necessary to export to these countries. |

16 | INTERNATIONAL | Danish Crown all over the world Around the world CHINA: PRESTIGIOUS DANISH MEAT

Pork from Friland is going on show in China. The aim is to participate in a sales-promoting event for Danish organic foods.

Sales to Sweden have been developing positively since Danish Crown decided to make the Swedish market part of its strategically important near markets.

7 May 2009 A number of selected Friland organic pork products are bound for China. Together with a range of other Danish or­ ganic food products, they are being displayed at the Dan­ ish consulate-general in Shanghai. The exhibition is a step on the way to getting Friland organic pork included in a promotional event for Danish organic food products in an international retail chain in Shanghai. The chain special­ ises in importing foods to the city which has a large foreign population, including 2,000 Danes. |

COORDINATED EFFORTS IN FRANCE 21 Jan 2009 Danish Crown’s three subsidiaries Friland, Tulip France and ESS-FOOD France are participating at the end of Janu­ ary in the French food fair Sirha in Lyons, where the main theme in the Danish tent is organic food.

- The French market for organic food has started to take off, and we have already seen an increase in our exports of both hams and spare-ribs, says Friland’s Sales Manager Marc Ridout. Sirha primarily aims to attract French buyers, and each year brings together 165,000 professionals to what is the biggest food trade fair in France. |

LIGHT IN THE EAST 23 Apr 2009 The Polish market is again taking an interest in meat cuts from Danish Crown. Since New Year 2009, the volumes sold have exceeded the level for the same period last year, despite slightly increasing prices.

- We are ahead of the game, and the future looks promis­ ing. There has been a fall in the number of slaughterings in Poland, resulting in rising prices. We therefore expect a healthy level of demand over the summer and increas­ ing prices, says Jens Rahbek, Export Manager for the east European market. |

ALL GO IN HUSUM 12 Nov 2008 Danish Crown’s Beef Division is expanding and increas­ ing capacity at its slaughterhouse in Husum in SchleswigHolstein. Investments are primarily being made in the cut­ ting facility at the German slaughterhouse, which is being enlarged to boost capacity from the current level of 400 tonnes in November 2008 to 600 tonnes in the longer term.

- The operating economy of the cutting facility has proved particularly attractive, and we therefore want to expand activities through more deboning of our own products, increased purchases from external suppliers and possibly the procurement of raw materials from Denmark, explains Lorenz Hansen, Managing Director of Danish Crown’s Beef Division.

In recent years, the cutting facility has supplied debonings and individual cuts to the entire European market, includ­ ing regular exports to Russia from the very outset. |

MORE CASINGS TO NORTH AMERICA 9 Feb 2009 DAT-Schaub and the previous owners of Casing Associ­ ates, one of the biggest casings companies in North Amer­ ica, are establishing a jointly owned company in the USA as of 1 January 2009.

- The USA has always been a key market for Danish pork cas­ ings, and Casing Associates has been one of DAT-Schaub’s biggest customers for many years. It therefore makes perfect sense for the two companies to work together more closely, says Jan Roelsgaard, CEO of DAT-Schaub A.m.b.a. |

Danish Crown strong in Sweden Danish Crown has always had good sales and a reason­ able level of business with the Swedes. The country is close to Denmark, and Swed­ ish consumers are good cus­ tomers who demand almost the same products as their Danish neighbours. In the latest strategy plan, it was agreed to forge even stronger links to Sweden.

Therefore, two years ago Danish Crown acquired two pork slaughterhouses – KLS in Kalmar and Ugglarps near Trelleborg – and part of the cattle slaughterhouse Team Ugglarp in Hörby, in which Danish Crown holds a 51 per cent stake.

At the beginning of last year, the first sod was cut for one of Europe’s most modern

retail-packaging facilities in Jönköping – K-Pack – which was inaugurated at the end of January this year. And in connection with DC Future, a completely new structure was announced in May 2009 for sales to the Nordic market under a joint umbrella – DC Nordic.

- We have created a unit with strong focus on value crea­ tion. We engage in close dia­ logue with customers, and our employees strive to keep in close contact with the mar­ ket to feel and hear what is happening in the individual areas, says Karsten Deibjerg Kristensen, CEO of DC Nor­ dic.

In addition to the three slaughterhouses under DC Livsmedel and K-Pack, DC

ONE OF EUROPE’S MOST MODERN

Nordic consists of Friland, the Domestic market depart­ ment and foodservice.

Increasing market share

Danish Crown’s pig slaugh­ terhouses in Kalmar and Ug­ glarp have managed to in­ crease their market share in the hard-pressed Swedish market. Slaughterings at the two slaughterhouses, KLS and Ugglarps, increased by 14.7 per cent and 16.1 per cent respectively in Q2 2009 rela­ tive to the same period last year. This is at a time when overall slaughterings in Swe­ den have fallen by 5 per cent.

- The Swedish market is very competitive and dominat­ ed by several large players, and we are therefore very proud that so many Swed­

ish pig producers have de­ cided to work with Danish Crown, says Karsten Deib­ jerg Kristensen, adding that this puts Danish Crown in second place with a comfort­ able margin in the Swedish market for pig slaughterings.

At the same time, cattle slaughterings at Team Ug­ glarps in Hörby have in­ creased from 400 animals to about 1,300 a week after the plant was modernised and an agreement reached with Scan AB on slaughtering cattle.

Close collaboration

Danish Crown has decided to concentrate its activities in the densely populated south­ ern part of the country where the logistics pose less of a challenge. The K-Pack retail-

Danish Crown all over the world

| INTERNATIONAL | 17

Tulip in Malmö

When Danish Crown acquired KLS and Ugglarps in Sweden, Tulip Food Company took over the processing part of the Swedish investments, in other words Ekvalls Charcuterifabrik, which produces sausages and private-label cold cuts.

To ensure that operations are efficient, Tulip FC decided to use the newly acquired office facilities by letting the Pølsemannen administration move into the premises at the meat factory near Malmö.

Sweden has a population of about 8.5 million, and the neighbouring Swedish market is regarded as a natural extension of Danish Crown’s domestic market.

packaging facility, which is designed to deliver 400 tonnes of packed foods to ­Axfood’s supermarket chains Willys and Hemköp, is situated­ in the middle of the region.

- K-Pack is a good example of how we are able to build up a close working relationship with a leading player in an important near market. We already possess considerable experience from developing sales in markets where we are locally represented. This is true for both the UK and ­Poland, where sales are larger­ because of access to ­local raw materials. In the same way, we expect the interplay ­between our slaughterhouses­ and the retail-packaging ­facility to positively influence future sales in Sweden, ­explains Karsten Deibjerg Kristensen. |

A total of 14 million people live in Sweden Jönköping

Gothenburg

and Denmark. 90 per cent of Danish Crown’s Swedish production is sold in Sweden while the

Kalmar

rest is exported.

Sweden is 70 per cent self-sufficient, with

Malmö

Danish Crown being the

Hörby

largest exporter to the country.

Ugglarp Danish Crown is boosting competitiveness in the global market with the opening of a new factory in Sweden.

Axfood chose to partner with Danish Crown because the company offers the most modern solutions and the highest quality.

10 Feb 2009 Today, Danish Crown an­ nounced the opening of its new retail-packaging facility in Jönköping. The production facility will supply meat to the Swedish retail chain Ax­ food, and is the most modern retail-packaging ­facility in Sweden and possibly even Europe.

In future, the new facility will be responsible for pack­ ing most of the meat which is distributed and sold in the Swedish Willys and Hemköp shops.

- Establishing one of Eur­ope’s most advanced retail-packag­ ing facilities stresses the fact that Danish Crown is able to compete on global conditions without losing­ touch with consumers. ­Today, being able to meet local­ demands for product selection while

remaining competitive are preconditions for being part of the global food industry, says Kjeld Johannesen, CEO of Danish Crown.

Highest quality

Axfood chose to partner with Danish Crown because the company has the most mod­ ern solutions and the highest quality within retail-packed meat.

- This new facility will sup­ ply us with products that are a cut above the rest, says Tor­ björn Lithell, Product Man­ ager for meat in Axfood, add­ ing: - We will see new and differ­ ent cuts, sausage products and, of course, seasonally­ tailo­red products such as barbecue products in the summer­ and Christmas products later in the year.

It means we can offer our

c­ ustomers a more appealing range in future.­

Built in record time

Danish Crown has construct­ ed the brand new production unit in Torsvik, about six kil­ ometres south of Jönköping.

The factory has been built in record time and sets several new standards within auto­ mation, occupational health and safety and hygienic de­ sign.

- It’s a very impressive build­ ing and boasts a high degree of automation. This trans­ lates into clear advantages for the working environment as repetitive work routines have been eliminated. At the same time, the facility has been designed to live up to strict requirements regarding cleaning-friendliness, says Niels V. Juhl, Technical Man­ ager of Danish Crown. |

18 | INTERNATIONAL | Danish Crown all over the world

THREE PACKS FOR A SLEDGE DOG 28 May 2009 The labels reveal that the meat is not destined for the local supermarket. ‘Saanikut Siatassat’ is written in large letters on the packets of neck bones in the cold store in Hadsund. They are proving a big hit on Greenland.

- For many years, Greenland has been an important mar­ ket for DC Hadsund. We sell approx. 1,000 tonnes a year, which roughly corresponds to 20 kg per inhabitant. And since we introduced the ‘Pick & Mix’ concept, sales expec­ tations have increased, says Jørn Sølvsten, Factory Man­ ager in Hadsund.

Goods twice a year

Whether it is Jørn Sølvsten’s local knowledge about Greenland after living there for many years or his knack of spotting a good business opportunity is hard to tell.

But Pick & Mix has quickly proved popular with con­ sumers on Greenland. The concept consists of 21 prod­ uct numbers, and the Green­ land consumers can put to­ gether the offers themselves.

Often they include three packs for a slegde dog.

- Greenlanders have differ­ ent shopping habits. Because of the difficult weather con­ ditions, in some places in the northernmost regions it is only possible to deliver goods twice a year. The ice melted not long ago, so we are now extremely busy, says Jesper Bislev Jensen, who is a master butcher in Hadsund.

Jutland joint and pigs’ hearts

DC Hadsund supplies goods to Greenland all year to the five harbours which are al­ ways ice-free. But summer is definitely their busiest period.

In addition to the popular neck bones, pigs’ hearts and collarbones also sell well.

However, Hadsund’s Jutland roast, which is a joint filled with prunes, is a sought-after dish on Greenland. |

Danish Crown’s departments in Denmark supply meat to the UK where it is processed and packed as Christmas hams. In December 2008, the factory in Faaborg sent one million hams off during the festive season.

ONE MILLION HAMS

9 Dec 2008

Cut into small squares, stuck with aromatic cloves or glazed with brown sugar and English mustard. The recipes are different, but the product is the same. Christmas hams from Danish Crown are a popular product with UK consumers.

A quarter of the hams in UK homes at Christmas come from Danish Crown.

Despite the financial crisis, UK customers are prepared to pay for Danish quality.

- We work ‘flat out’ as they say in the UK – both day and night. Right now the orders are streaming in, and over the next few weeks we will supply a quarter of all the hams for the UK market, says Lars Albertsen, CEO of Dan­ ish Crown UK.

Faaborg sends most

The hams are cut, packed and sent from Danish Crown’s factory in Faaborg, which produces about 90 per cent of all the hams. In all, one mil­ lion hams will be supplied in the run-up to Christmas 2008.

- Even though the pound sterling has fallen consider­

ably in value, it is still good business sending hams over here rather than selling them in other markets. Despite the financial crisis and generally lower sales in the UK, con­ sumers are willing to pay a reasonable price for the hams, and this cancels out the lower exchange rate, ex­ plains Lars Albertsen. |

Danish Crown all over the world

GERMAN BUTCHERS IMPRESSED

| INTERNATIONAL | 19

News about Names Japanese praise Kjeld Johannesen 21 Nov 2008 Danish Crown’s CEO Kjeld Jo­ hannesen has been named hon­ orary consul-general for Japan in Aarhus.

Honorary consul-generals are unpaid, and are expected to look after the interests of Japan and its citizens in cities which do not have a Japanese embassy.

In practice, Danish Crown’s head office in Randers serves as the base for the Japanese honorary consul-general. |

New Vice President for DC in Sweden 29 Jan 2009 ‘Fleisch aus Dänemark’ is something special. That was the conclusion when, at the end of January 2009, about 50 German butch­ ers from Schleswig-­Holstein visited­ the slaughterhouse in Horsens­ and the fresh meat terminal in Kolding.

On top of the logistics, hy­ giene and the constant pace of work, they were also great­ ly impressed by the finished result.

- Our German colleagues didn’t think it was possible to get meat of such a uni­ form and standardised qual­ ity, and this made quite an impression, says Hans Hen­ rik Johansen, proprietor of

the butcher’s shop Aabenraa Slagteren, and one of the men behind the German visit.

Groundbreaking ideas

Hans Henrik Johansen is a Danish Crown/Friland cus­ tomer, and he is also involved in a Danish-German network in which butchers exchange groundbreaking ideas­ for their butcher’s shops. Ger­ man butchers frequently drop into Hans Henrik’s shop in Aabenraa, and they often want to know how he manages to have such good beef and pork in his counter.

- I don’t think there is any­ where else where the quality of the pork matches that of Danish meat. Danish meat is

The proprietor of Aabenraa Slagteren gave 50 German butchers a tour of Danish Crown, and the work routines, hygiene and meat quality all made a big impression. standardised down to almost the last muscle. In Germany in particular, with its tradi­ tion for producing many dif­ ferent types of sausages from the meat, it is important for the operating economy as it

reduces wastage consider­ ably. I have drawn up a cal­ culation which shows that it pays for them to buy their meat in Denmark, he says.

A proud butcher

This was the third such trip organised by Aabenraa Slag­ teren.

- I am just thrilled with the meat I buy from Danish Crown and Friland, and I am also proud that we have such good meat here in Denmark. And I just can’t stop telling my German col­ leagues about it, says Hans Henrik Johansen. |

‘There’s no place like home’ is slightly off the mark as far as generating good earnings for organic pig producers is concerned.

- The domestic market is good and important, and we want to help develop and ex­ pand it. But when we can ob­ tain a higher price in the ex­ port markets, that’s what we must do because at the end

Friland is once again a leading organic meat supplier in Europe after being launched on the French market.

of the day it’s a question of earning as much as possible for the producers, says Fri­ land’s CEO Karsten Deibjerg Kristensen.

Favourable prices

Last year, Friland lost mar­ ket share for its organic pork in the UK, which has been particularly hard hit by the ­financial crisis. Since then it has acquired a strong pres­ ence in the French market,

Johan Andersson has been appointed new Vice President of Danish Crown’s Swedish subsidiary, Danish Crown Livsmedel AB. Johan Andersson takes up the position on 14 April 2009 and will be responsible for purchasing, sales and information in Danish Crown Livsmedel AB. Johan Andersson is 43 years old and one of the most ex­ perienced people in the Swedish slaughterhouse business where he is a well-known face in sales and purchasing cir­ cles. He comes from a position as Business Development Manager in Scan AB, where he was a member of the man­ agement group. In his present position he has 12 years of experience as head of purchasing. |

New CEO at Tulip Ltd 11 Sep 2009 Tulip Ltd has appointed Steve Murrells for the newly cre­ ated role of CEO for its UK operations. Steve Murrells, who will take up his position in early October, will report dir­ ectly to Carsten Jakobsen, who remains Chairman of the Board of Tulip Ltd and Vice CEO/President International of Danish Crown.

Steve Murrells, 44, brings with him a wealth of experience gained in a variety of positions with Tesco PLC, includ­ ing Commercial Director, Fresh Foods, CEO of One Stop Stores, and most recently he was responsible for the inte­ gration of Dobbies, the UK’s second-biggest chain of gar­ den centres with 25 stores.

- Tulip is already a very successful business, and in my new role I will be helping to shape the future of the UK oper­ations. I am looking forward to working with my new colleagues to build on Tulip’s market-leading position in the UK market, says Steve Murrells on his appointment in ­autumn 2009. |

new CEO at Plumrose USA

ECO HAM A HIT IN EUROPE 22 May 2009

9 Jan 2009

1 Jan 2009 Plumrose USA also has a new CEO. It is David Schanzer, who has an impressive career behind him within the US food industry. He started working at Kraft Foods, Inc as Associate Brand Manager for Cheese, Cheez Whiz and Handi-Snacks in 1985, and during his eight years with the company worked his way up to become Director of Strate­ gic Planning & Business Development, Oscar Mayer Foods. where prices are particularly favourable. At the same time, the German market has sta­ bilised, and Friland is begin­ ning to find its feet as one of Europe’s leading suppliers of organic meat.

In Denmark, organic meat accounts for only 1 per cent of the total market, while as much as 10 per cent of or­ ganic meat in Europe comes from Danish pigs. |

In 1993, David Schanzer moved to Con Agra Foods Inc, where he ended his career in 2000 with the title of Senior Vice President & General Manager, ASE Consumer Prod­ ucts.

Since then he has held key positions in the Performance Food Group, Advantage Organic and Forsters Farm, ­before becoming CEO of Global Fresh Foods in 2005. David­ Schanzer­held this position until taking up his appointment­ with Plumrose. |

20 | INTERNATIONAL | Danish Crown all over the world Part of the Danish Crown Group Danish Crown has departments worldwide. Today, there are 95

departments outside Europe – 49 production facilities and 46 sales offices. In recent years, an ever larger share of production has been moved closer to the markets as part of a strategic ‘flagging-out’ of production.

Difficult year for ESS-FOOD A/S The economic crisis has been acutely felt by ESSFOOD A/S, but Managing Director Morten Holm is

Adjustments in ESS-FOOD France

positive about the future.

It has been a hard year for ESS-FOOD. Falling demand in Russia hit ESS-FOOD, and the company has al­ so struggled with custom­ ers who lost their credit fa­ cilities with the banks and could therefore not honour their commitments.

This has entailed serious losses for ESS-FOOD, par­ ticularly in Russia. Partly because many goods had already been dispatched when the crisis struck. This meant that the company had to find alternative cus­ tomers, leading to signifi­ cant losses.

- The crisis has meant that there are various custom­ ers we can no longer trade with because they lack credit, and this has had serious financial implica­

tions. We have also had to cut our costs, and for exam­ ple 24 employees have been made redundant at both the head office in Brøndby and abroad. In addition, we have closed our representa­ tive offices in Moscow and Toronto, says Managing Dir­ector Morten Holm.

The total savings amount to approx. DKK 12 million, which is fully implemented­ from the start of the new ­financial year.

Having been able to quick­ ly tailor operations to this reduced level of activity is only one of the reasons why Morten Holm takes a bright view of the next year, as there are several markets which look promising. |

ESS-FOOD France has had a mixed year with exports under pressure on the one hand but growth for RAYNAL PETERSEN on the other.

The financial crisis has been hard on many customers, and this has also been felt at ESS-FOOD France, which has been under pressure after many customers had their credit lines cancelled.

Russian and east Europe­ an customers in particular became unable to pay, and this meant that ESS-FOOD had to sell to the European market at lower prices.

- During the first eight months of the financial year we lost a lot of revenue in the trading companies, but customers have returned over the last four months and are now paying cash before we ship the goods.

This improves cash flow and also means we do not carry any risk of custom­ ers being unable to pay, says Tommy Jensen, Gen­ eral Manager of ESS-FOOD France.

All things considered, he is

moderately satisfied with the results.

- For the Group as a whole, it has been an okay year which sees us returning a profit, but one which is low­ er than that for 2008, says Tommy Jensen.

The profit is due in part to the fact that it has been a good year for the subsid­ iary RAYNAL PETERSEN, which sells to the retail, cash-and-carry and catering market in France. Among other things because the fi­ nancial crisis has caused necessary adjustments to be made earlier than planned.

- The market in France has been characterised by many small producers who have kept prices under pressure.

Many of them have disap­ peared, which means that customer orders are big­ ger and spread over longer­ periods, says Tommy Jensen. |

Danish Crown all over the world

| INTERNATIONAL | 21

- We have managed to ensure synergies in our operations, and thereby compensate for the commercial pressure on sales. We have come through the year in one piece. Carsten Jakobsen, Vice CEO, President International.

Carsten Jakobsen Vice CEO, President International

Strengthened Tulip Ltd Adjustments have strengthened competitiveness for Tulip Ltd in the UK. - We have had a challeng­ ing year, but have come through in one piece.

This is how Vice CEO Carsten Jakobsen sums up Tulip’s success on the hardpressed UK market which has generally been charac­ terised by falling consump­ tion as a result of the finan­ cial crisis.

But while others have been hit hard by the economic situation, Tulip has man­ aged to adapt to the new times.

- We immediately set to work to cut costs. We closed several facilities and con­ solidated production at the remaining factories, so that we have improved our competitiveness. We have managed to ensure syner­ gies in our operations, and thereby been able to com­ pensate for the commer­ cial pressure on sales, says Carsten Jakobsen.

- The large chains have gen­ erally exerted considerable pressure on suppliers to lower prices. At the same time, thanks to strategic collaboration with the larg­ est supermarket chains, we have developed the right products for the benefit of both parties, securing our market share in the UK. The new market condi­ tions have contributed to consumers changing their shopping habits, and Tu­ lip has therefore launched more than 400 new prod­ ucts on the market. This has been realised in close col­

laboration with the most important customers and is largely the reason for Tu­ lip’s success.

The plan is also to continue focusing on product devel­ opment.

- We have employed a new innovation manager who will manage the develop­ ment of large projects and develop completely new product categories with­ in our core business, says Carsten Jakobsen.

Tulip Ltd has also em­ ployed a CEO, Steve Mur­ rells, who took up his ap­ pointment in Tulip Ltd on 5 October after previously holding jobs as managing director at two of the UK’s largest retail chains.

- One of Steve Murrells’ strengths therefore is that he knows what the retail chains require of their sup­ pliers, and he can make Tu­ lip Ltd even more customer-­ oriented. This is what we need in our organisation as we need to be close to our customers, says Carsten Ja­ kobsen, and continues: - The economic situation is set to throw up new chal­ lenges in the coming years, and new and targeted ac­ tivities are therefore being planned on several fronts: customer focus, better prod­ uct innovation in collabor­ ation with key customers and continued streamlining of production, including in­ vestments in more efficient equipment. |

Full steam ahead for Plumrose USA Capacity is fully utilised in Plumrose USA, which has had a good year.

Plumrose USA offers a number of product groups which are in strong de­ mand, not least during an economic crisis. This is one of the reasons why Plum­ rose has had a very reason­ able year with satisfactory earnings.

- We are making the most of the fact that we are utilis­ ing capacity to the full. As a result, we have reduced costs per kilogramme, and I

also expect to be able to ex­ ploit Plumrose’s capacity to the full in the coming year while also focusing hard on costs, says Vice CEO in Danish Crown, Carsten Ja­ kobsen.

In the past year, Plumrose has appointed a new CEO, 48-year-old Dave Schanzer, who has assumed respon­ sibility for the day-to-day running of the company. |

22 | INTERNATIONAL | Danish Crown all over the world Part of the Danish Crown Group

Strong demand for natural casings There is still a healthy demand for high-quality natural casings, and even the economic crisis has not been able to hamper DAT-Schaub’s positive development.

Positive figures on the bot­ tom line at all DAT-Schaub’s production and sales com­ panies testify to the consid­ erable demand for the com­ pany’s products.

This succinctly describes the situation for DAT-Schaub, and CEO Jan Roelsgaard is very satisfied with develop­ ments.

- In 2009, we have been un­ able to achieve the record high prices seen in 2008, but demand for our prod­ ucts has been strong, and the market for natural cas­ ings is again develop­ ing positively, reports Jan Roelsgaard.

Artificial casings have al­ so enjoyed strong price in­ creases in recent years, but now more moderate price growth is being seen.

- However, this doesn’t change the fact that custom­ ers are still having to wait for the most popular qual­ ities, confirming that many customers prefer our prod­ ucts, says DAT-Schaub’s CEO. Moreover, DAT-Schaub has been significantly strength­ ened in the North Ameri­ can market for natural cas­ ings as the company has acquired 50 per cent of the equity in Casing Associ­ ates LLC, which generates annual revenue of USD 50 million.

- Obviously, this will rein­ force our position in North America considerably, and expectations are high with regard to both sales and market position, says Jan Roelsgaard.

He is in no doubt that the re­ cent structural adjustments mean that DAT-Schaub has become a sought-after part­ ner for the food industry both in countries where the company has offices and in the export markets served from Europe and North America.

The positive development in prices for pork casings means, ironically enough, that DAT-Schaub can look forward to lower earnings in future as suppliers are paid cash up front.

As of the start of the financial year, the principles govern­ ing the prices paid to Danish owners have been changed.

The casings are now contin­ ually settled at market price, while the previous payment was part of DAT-Schaub’s profit. The new principle will, all else being equal, re­ duce the nominal financial results.

- Therefore we are delight­ ed to be able to deliver very satisfactory financial results this year, where a triple-­digit million sum has been paid out in regular instalments to our cooperative members, says Jan Roelsgaard. |

Growth in Poland Sokołów’s revenue is up 16 per cent despite the economic crisis.

Sokołów is the strong­ est meat brand in Poland.

This is confirmed by devel­ opments in the company­ which is jointly owned

by Danish Crown and HKScan.

- During crises, the strong grow stronger and the weak weaker. This is clear­ ly the case in Poland, where Sokołów’s revenue has increased by 16 per cent measured in local curren­ cy, while Polish meat con­ sumption as a whole has fallen by approx. 5 per cent, explains Danish Crown’s Vice President Svend­ Erik Sørensen, who is also­ a member of Sokołów’s Board of Directors.

Not only sales, but earn­ ings in Sokołów have been growing, while many small and medium-sized com­ panies have found trading conditions hard.

- Hundreds of smaller com­ panies have folded over the past year, while Sokołów

has been able to increase its market share. Consequent­ ly, we are seeing a polar­ isation of the Polish market, says Svend Erik Sørensen.

In this context, it is also worth noting that Sokołów is market-leading in terms of ready-packed processed products.

- Usually, the degree of processing increases as a society develops, and with regard to sliced products, which are relatively new in Poland, Sokołów has a very solid market position, says Svend Erik Sørensen, while noting that the challenges in Sokołów’s primary pro­ duction are in the process of being solved.

- The large breeding herds are in place, and this means that we are now in the pro­ cess of securing a supply of Polish raw materials to Sokołów for the com­ ing years, says Svend Erik Sørensen. |

Danish Crown all over the world

| INTERNATIONAL | 23

Scan-Hide counting on growth Purchasing the Swedish hide company has resulted in an increased level of activity for Scan-Hide.

Like the rest of the industry, it has been a turbulent year for Scan-Hide, as the global leather and raw hide indus­ try has had its worst crisis in 25 years. At the end of 2008, the company on Fu­ nen was hit by the financial crisis, causing sales of cat­ tle hides to basically come to a standstill. In just two weeks, the world market price fell by 50-70 per cent.

Inventories grew, and it wasn’t until the end of the 2008/09 financial year that sales – and prices – started to pick up again. And they are still at a historically low level.

Marked growth for Tulip Food Company

Altogether, the number of treated hides fell by 4 per cent to 809,336 hides. How­ ever, a stop was put to this development with the ac­ quisition of the Swedish hide company Kontroll­ hudar International, which will increase Scan-Hide’s level of activity to 1,100,000 hides a year.

- It has been a tough year, but I think we can see the light at the end of the tun­ nel. After the acquisition we will be one of the biggest hide companies in Europe, says Scan-Hide’s CEO, An­ ders Autzen. |

Despite it being a very turbulent time, Tulip’s results are far better than last year. Focus on costs and new products has strengthened the company.

Friland’s exports booming Exports rose, while sales to the domestic market remained stable.

After several years of strong growth, Friland posted rev­ enue of DKK 460 million for the year, corresponding to a slight fall of 3 per cent.

However, an extensive re­ structuring programme and significant growth in exports of organic pork produced a noticeable improvement in profit, which totalled DKK 7.8 million.

But the decline in revenue conceals big differences.­ Sales of the company’s main organic meat products­ and Friland pork are ba­ sically unchanged in the domestic market, while sales of specialist products and more exclusive beef have been under consider­ able pressure as a result of consumers’­ restraint with

regard to purchasing more expensive items.

This year’s big success was the 44 per cent increase in exports of organic pork.

The meat is being export­ ed to France and Germany, among others, and now ac­ counts for 61 per cent of Fri­ land’s total sales of organic pork.

In the past year, Friland has implemented significant ra­ tionalisations, which have, for example, meant that sales to the domestic mar­ ket are now partially inte­ grated with corresponding functions in Danish Crown, just as Friland’s adminis­ tration has moved to Dan­ ish Crown’s head office in Randers. |

Unswerving focus on costs and on efficient marketing means that Tulip is deliver­ ing results which are mark­ edly better than the previ­ ous year and approx. 20 per cent better than budgeted.

By reducing the number of salaried employees by more than 10 per cent and main­ taining its general focus on costs, Tulip has been able to weather a situation in which the global econom­ ic crisis has meant smaller volumes.

- An unavailability of ex­ port credits and poor ex­ change rates have meant that we are particularly hard-pressed in the im­ portant UK market and with respect to our sales to overseas markets, says Tu­ lip’s CEO, Flemming N. Enevoldsen.

The financial crisis also means that consumers eat out less, and this has affect­ ed Tulip Food Company’s sales to the catering sector.

On the other hand, the com­ pany has had a good year in Scandinavia and, together with significantly improved operations at the factor­ ies and marked savings achieved by the purchasing department, it means that the Tulip Food Company is returning markedly better results than last year.

- However, the profit is still not at a satisfactory level, and the coming year

will therefore also require further­ measures with a view to increasing profit.

We are maintaining our fo­ cus on costs, and this has meant, among other things, that we are closing the fac­ tory in Sdr. Borup and shar­ ing production between the other factories. We are also working to simplify business operations by cut­ ting the number of product numbers and recipes, says Flemming N. Enevoldsen.

The ongoing cost-saving measures will be combined with a strong focus on new and innovative products designed to enhance the value of Tulip’s sales. The new initiatives include Tu­ lip’s new plastic can which was launched in autumn 2009. At the same time, Tu­ lip is investing consider­ able development resources in becoming market lead­ er within the provision of meals to schools and other institutions.

Efforts are also being made to improve our reliability of delivery. Analyses show that it has already improved greatly, but the aim is to be even better.

- The financial crisis is not over, but I am convinced that Tulip is now better geared and will experi­ ence increased revenue and earnings in the coming years, says Flemming N. Enevoldsen. |

24|

Debate

A cooperative with values Danish Crown is owned by

10,685 farmers, an ownership structure which is continually being revised. For example, in 2009 a new settlement model was introduced as part of DC Future.

Clear plans for the future Danish Crown’s members supply raw materials to the company daily. Pigs, sows and cattle constitute the Group’s most important resources. In the past year, financial pressures on members have grown, which has led to falling numbers of animals for slaughter. To counter this, Danish Crown launched a new settlement model as part of DC Future. The new model is designed to ensure competitive prices for the company’s owners.

The financial year has generally been char­ acterised by big, existential and protracted challenges. An economic crisis among pig producers worldwide was superseded by an emerging global financial crisis at the start of the financial year. Everywhere the demand for meat fell while production globally was too high. At the same time, Danish Crown’s supply of raw materials was threatened due to increasing Danish exports of piglets.

- We found ourselves in an extreme situa­ tion where, as a company, we had to bring our size and capacity into line. Previously we have closed departments, but in the past it has been as part of rationalisations. For the first time ever, we were having to close facil­ ities because our overall production was fall­ ing. We have reluctantly had to say good­ bye to almost 3,000 employees, but the steps have been necessary to preserve our competi­ tiveness in an extremely tough market, ex­ plains Niels Mikkelsen, Chairman of Danish Crown’s Board of Directors.

In step with the times

While Danish Crown has been through a ­period of readjustment, many of its mem­ bers have endured a long and hard existen­ tial struggle. The industry has been tested to the limits, while the entire business sector has suffered a decline in competitiveness. To retain its position as a key player in the glo­ bal meat market, in May Danish Crown in­ troduced DC Future, which is a nine-point ­action plan in which the DC Settlement Sys­ tem is part of the overall plan and of crucial significance for the company’s owners.

- The DC Settlement System is a brand new settlement system which can be used by all pig and sow producers. It is an open and transparent system that allows producers to freely choose from the available options. ­Regardless of production type and pattern, it can benefit everyone as long as farmers are willing to adjust their farm operations. They

might be expected to think innovatively. But that is par for the course in a rapidly chang­ ing world in which we have to adapt to the changes, competition and forces in the mar­ ket. We do not operate in a static system, and therefore we have listened to the members’ views, says Niels Mikkelsen, adding that the settlement system came into effect on 5 Octo­ ber 2009.­

Danish Crown’s Chairman of the Board, Niels Mikkelsen, has been one of the driving forces behind the implementation of the DC Settlement System.

Shared responsibility and common ownership

During the year, a number of dialogue meet­ ings have been held with members at which the running of the Group and the new set­ tlement system have been discussed. The discussion about the DC Settlement System sometimes caused shockwaves among the farmers, says Niels Mikkelsen.

- Before, we had a slightly rigid system which was devised at a time when members were more similar. Now we have a system which reflects that things have changed and which considers the interests of all groups of pro­ ducers. This has been the message when meeting the owners in an open dialogue about the challenges we face as a Group. We have described the situation we are seeing in the markets, and presented a plan for the im­ plementation of the necessary changes. This has occasionally sparked a lively and heated debate, and strong arguments have been put forward. For me, this demonstrates that a lot of owners feel a strong sense of responsibil­ ity and ownership towards our joint business, says Niels Mikkelsen.

Unequal terms

While it will be a while before the effects of the DC Settlement System are fully felt, after only three months of DC Future the Board of Directors could detect marked improvements in the company’s economy. Most of these im­ provements have been achieved through de­ liberate cost cuts in primary operations, while external costs have still not been correspond­

A cooperative with values

| Debate | 25

- There are fewer and fewer working farmers, which means fewer shoulders to bear the joint tasks and costs. A natural step has therefore been to consider how we can coordinate our efforts with the organisations and companies with whom we share interests and challenges.

ingly reduced. This is particularly true of the costs relating to veterinary activities etc.

- Here in Denmark more stones have been placed in the wagon so it’s heavier than be­ fore. A number of burdens have been imposed on us politically, while our competitors south of the border have seen a relaxation in rules, in some cases even incentive measures. And this is a tough blow for our competitiveness.

The underlying conditions need to be seen in perspective, and if part of the value chain is affected, the rest suffers, says Niels Mikkelsen.

Fewer shoulders to share the burden

The number of Danish Crown producers and owners fell throughout the year, and hand in hand with a smaller circle of owners, it be­ came necessary to look at the distribution of the joint costs.

- There are fewer and fewer working farmers, which means fewer shoulders to bear the joint tasks and costs. A natural step has therefore been to consider how we can coordinate our efforts with the organisations and com­panies with whom we share interests and chal­ lenges. This has, among other things, resulted in a streamlining of the Danish Agricultural and Food Council so as to give us more clout vis-à-vis the political system when speaking with a single voice, says Niels Mikkelsen.

Joint benefits

Danish Crown has exports to more than 130 countries. Every time ten refrigerated trucks leave one of the Group’s slaughterhouses, nine of them continue beyond the Danish border. At the same time, growing volumes of

A number of burdens have been imposed on us politically, while our competitors south of the border have seen a relaxation of rules, in some cases even incentive measures.

And this is a tough blow for our competitiveness.

meat are being processed outside Denmark.

In practice, Danish members control the en­ tire value chain from farm building through to sales in the world’s most lucrative markets.

And this benefits all owners, believes Niels Mikkelsen.

- Today, we can see the advantages of our international strategy which is based on processing and value creation combined with sales in selected high-price markets such as Japan, the USA and Australia. Our clear pres­ ence in the UK and Polish markets has con­ tributed positively to the prices which have been achieved, and most recently our posi­ tion in the neighbouring Swedish market has also borne fruit. As our overall production has fallen throughout the year, we have man­ aged to obtain higher prices for our products in selected markets, he says.

Safety in sales

While the financial crisis has put a damper on the world economy and caused a temporary halt in Danish Crown’s investments and ex­ pansion projects, a number of slaughterhouse companies on the global meat market are ex­ periencing serious problems and being forced to implement cuts. Danish Crown has also had to make cuts and necessary adjustments, but in our case mutual dependence is also an important precondition for both the Group and the members being able to develop over the long term.

- There is a basic resilience in our sales sys­ tem. We are both large and very flexible at the same time, and can therefore adapt to the challenges in the different markets. Other­

companies are pursuing another strategy, but here we see greater vulnerability in relation to changes in the market. Our strength is an international, multi-branched sales system which matches our export trade. Alterna­ tives might, of course, be competitive in the short term but, in my opinion, Danish Crown will win in the long run thanks to its stability.

The Group and its owners are dependent on each other, and stability and mutual depend­ ence thus constitute the foundation for joint growth. Therefore, it is of course regrettable that some cooperative members have chosen to leave the company in the course of the year.

But I wish them the best of luck. On the other­ hand, I would like to welcome all the new members who have joined and who, together with those of us who have been members for some years, have decided to help strengthen Danish Crown. The prospect of developing Danish Crown together in future is exciting, says Niels Mikkelsen. |

26 | Debate | A cooperative with values

Praise and advice PIG PRODUCERS AND DC PRAISED IN CANON

Serving science

19 Jan 2009 The Monday Morning weekly has, together with five leading professors, selected twelve Dan­ ish leadership successes to be in­ cluded in a new leadership canon. Danish pig production has been chosen as one of the twelve biggest successes, and Danish Crown is mentioned in particular as a key player in Danish pig production.

“Forming a group the size of Danish Crown is a leader­ ship achievement in itself. However, the Group is not just a product of its cooperative members. Its strength rests on the efficiency of the individual farmer. The leadership success which has led to the pig sector being included in this Danish canon on leadership is a collective achieve­ ment. Major groups and mass production can grow out of a culture of independence when the individual produc­ ers work together and commit themselves to systematic knowledge sharing” reads the quote from the 2009 Danish Canon on Leadership. | Read more at www.ledelseskanon.dk (Danish only)

MORE ADVICE FOR OWNERS 4 Nov 2008 - In recent years, DC Member Service has started offering a number of new services. Previously DC Member Service handled a predominance of practical tasks in connection with settlements, but now we provide far more advice about various aspects of deliveries and the settlement sys­ tem as well as personal service, says Vagner Bøge, Deputy Chief Executive of DC Member Service.

Following a restructuring process and the allocation of new tasks, the time has come to look at the outward sig­ nals from DC Member Service, and the department now has a new visual look. In future, the new logo will be used to clearly signal who is behind each initiative – the first time will be at Agromek, where DC Member Service will talk about the new possibilities for existing and potential members of Danish Crown. |

SUCCESsFUL TRIAL SCHEME

PIG NO. 15,000,000 IN HORSENS

23 Jun 2009

11 Jun 2009

Since November last year, Danish Crown’s Beef Div­ ision has been inviting new suppliers to try out the bene­ fits of being a member for six months.

One pig, two pigs, three pigs ... Danish Crown’s slaugh­ terhouse in Horsens opened four years ago and has since gradually expanded capacity. Both in step with the run­ ning-in of the slaughterhouse and the individual lines and with the granting of the necessary environmental approv­ als. At the moment, 93,000 pigs are slaughtered each week, and in June 2009 pig number 15 million was slaughtered. |

HAULIERS’ MEETING ON ANIMAL WELFARE 17 Oct 2008 Last week, 27 hauliers and drivers who normally deliv­ er cattle to the Beef Division’s slaughterhouse in Tønder opted to spend the afternoon with vets from the slaugh­ terhouse and the Danish Ministry of Food, Agriculture and Fisheries’ flying squad. Inger Overgård, a vet with the flying squad, talked about suitability for transport. Do animals suffer unnecessarily during transport? Is legisla­ tion being complied with? These two questions were ad­ dressed in depth using pictures and videos with animals.

- From a legal point of view, it is the hauliers who are le­ gally responsible for transporting the animals, but the farmers also need to play an active role to ensure the rules are being followed, says Ejvind Kviesgaard, head of de­ partment at DC Member Service. |

Good service

As a bonus supplier you re­ ceive DKK 0.70 per kg in ad­ dition to the normal price during the trial period, but you are not entitled to any supplementary payment.

However, it is not usually the price which suppliers men­ tion when speaking to the DC Member Service consult­ ants.

- Most farmers are very sat­ isfied with the service. I have

More suppliers are choosing to join Danish Crown once the trial period is over. just spoken to one farmer who, the day after he signed up, was called by the haulier who asked when he would ideally like to have the ani­ mals collected, says Ejvind Kviesgaard, who is head of department in DC Member Service.

The scheme started as a trial project, but after several suc­ cessful months it became per­ manent. |

It is the excellent service in particular that persuades potential suppliers to register permanently with Danish Crown.

A cooperative with values

13 Aug 2009 Four doctors and research­ ers from Aarhus University Hospital stand around the patient trying to generate imbalances in the heart. Or a defect which they can then treat. The patient is a pig, but for the heart specialist Steen Buus Kristiansen it is not the first time that he is perform­ ing an operation on one for the sake of research.

- We want to be able to treat heart failure – for example poor pumping function – with a pacemaker. And if we cannot conduct this sort of research on humans, we use pigs instead as they closely resemble humans, says Steen Buus Kristiansen.

Regular supplier

The pigs come from a particu­ lar farm which has supplied the hospital in Skejby since 1982. It was originally chosen because it was – and still is – the closest farm to the hos­ pital.

| Debate | 27

the production of hospital pigs from his father in 2001.

At Aarhus University

With a shovel and wheelbarrow

Hospital, researchers use pigs for complex heart

To be able to meet hospital re­ quirements, Lars Bo Kjeldsen needs to spend more time on the pigs than other pig pro­ ducers. The pigs live in older housing units. They are fed by hand and have a thick lay­ er of straw on which to lie.

- Each pig has to be abso­ lutely healthy. They mustn’t have any cuts, blood blis­ ters or any type of infirmity.

Most pig producers would prob­ably not be interested because there is so much manual­ work. I spend three or four hours each day feed­ ing the animals and mucking out. So it wouldn’t be profit­ able if it was an ordinary pro­ duction unit, says Lars Bo Kjeldsen.

The experiment is the first of its kind in the world, and one of many groundbreaking experiments carried out at Aarhus University Hospital. |

research, a project which requires a special effort on the part of the supplier.

- I supply about 1,000 pigs a year to the hospital, and about 1,500 to Danish Crown.

I need to have a range of dif­ ferent-sized pigs so the hos­ pital has something to choose between. Sometimes I’m asked to deliver within the space of 15 minutes, for ex­ ample if the ‘patient’ dies on the operation table, says Lars Bo Kjeldsen, who took over

Pigs on the operation table at Aarhus University Hospital in Skejby are an important part of research.

There is a lot of hands-on work involved when supplying pigs for the operating table.

UNITED WE STAND 28 May 2009 The flags have been hoisted, the gravel raked and a dis­ creet sign by the roadside announces the open house event at the Poulsen family farm.

On a bare field outside Høve on Zealand, Poulsen I/S has built a housing unit with space for 1,070 sows and an annual production of approx.

32,000 30-kg piglets. And the three owners are very enthu­ siastic about the project.

- I feel both happy and proud when I drive along the road.

The buildings are impressive and blend in really well with the surrounding countryside, says 34-year-old Rasmus Poulsen.

Staking on the future

He represents the fourteenth generation of the Poulsen family at Lilåsgården which dates back to 1590. Together with his father and uncle, the thirteenth generation, he has invested heavily in the fu­ ture.

- For many years, my father and uncle have produced free-range pigs in the town.

Times are hard, but the Poulsen family is investing in sow and piglet production because the two generations want to stand strong in future.

They have produced piglets and fattened many of them up for slaughter at Danish Crown. However, the three of us felt that the time was ripe to take the plunge and change direction. We have therefore gone into partner­ ship, says Rasmus Poulsen, who has just joined the fam­ ily firm after several years working at a variety of large agricultural enterprises.

- We realised that we are stronger together. I possess the necessary knowledge and experience, but not the capi­

tal. That’s what they have, says Rasmus Poulsen.

A modern farmer

At the moment the new pens are empty. The sows are waiting at the family’s other farms, where they are being kept prior to mating.

- I am probably most proud of the wide aisles where there is space for both the work­ ers and animals. The work­ ing environment is ideal, and we are counting on one sow per box, and for the sows to spend four weeks in the serv­

ice/control pen after mat­ ing, and then in the gestation pens, says Rasmus Poulsen, and continues: - My priority has been to ensure that production is as auto­matic as possible. A modern farmer’s family also expects to be able to take time off and do things together. |

Both knowledge, experience and capital are necessary ingredients for agriculture to ­develop.

28 | Debate | A cooperative with values

- Agriculture is modern corporate management. I am just as much of a businessman as I am a farmer, says David Nielsen, Skarrild, producer of heavy pigs and pigs for slaughter.

NEW SETTLEMENT SYSTEM STRENGTHENS COMPETITIVENESS 5 Jun 2009 In October 2009, Danish Crown is introducing its DC Settlement System to give members the chance to adapt and optimise their deliveries and production of pigs for slaughter.

- We have decided to offer a range of attractive options to give the individual member the freedom to use the DC Settlement System in relation to his own farm and produc­ tion. The overall objective is to offer a system which is

Regardless of whether you are a small, mediumsized or large pig producer, you can customise your production pattern to suit the options offered by the DC Settlement System.

both competitive and market-­ oriented so we can compete on market terms. At the same time we have stressed the im­ portance having an objective and transparent system, says Vagner Bøge, Deputy Chief Executive of DC Member Service.

Benefits everyone

A precondition for boosting competitiveness is to guaran­ tee the supply of raw materi­ als because a reliable influx of pigs ensures maximum capacity utilisation at DC’s

production plants. Every­ time the number of week­ ly slaughterings in Danish Crown rises or falls by 10,000 pigs, it directly affects the prices for all the members.

- Everyone can benefit. Many members will be able to ben­ efit immediately, while others­ will need to change the way they go about things or ad­ just their production slightly, says Vagner Bøge.

The DC Settlement System consists of DC Logistics, DC Market and DC Contract.

The DC Settlement System

is designed for all Danish Crown’s pig producers. Sow producers can also benefit from the new settlement sys­ tem. DC Logistics functions as a deduction in relation to the gross payment, DC Mar­ ket is a supplement while DC Contract is a range of options which can be adapted to the individual owner’s produc­ tion patterns. |

A cooperative with values

- WE LOOK AT THE RUMPS AND BACKS 27 Apr 2009 At the end of April 2009, 15 farmers gathered at the cat­ tle slaughterhouse in Tønder near the German border to take a closer look at seven ani­mals, four young bulls and three heifers, to assess them before and after slaugh­ ter. The aim of the exercise was for the farmers to be­ come better at assessing their own animals before sending them for slaughter.

The animals were carefully appraised in the pens, and there was a lot of talk about feeding strategies, muscular­ ity and fat distribution. After a quick lunch, the same ani­ mals were finally assessed and compared with the ini­ tial assessment.

- I have misjudged the heif­ ers. The young bulls were considerably lighter. It’s hard to assess breeds which you don’t normally work with, says Jens Gert Nielsen, a Blonde man who comes from Gram in southern Jutland.

BETTER SERVICE ATTRACTs NEW OWNERS

To learn how to assess their own animals, cattle producers have been attending courses at the slaughterhouses.

8 Jan 2009

Long legs

GROWING INTEREST IN PIGLETS

Geddebækholm lies on the outskirts of Kjellerup in cen­ tral Jutland. Located up a gravel road behind a low range of hills, the focus at this highly professional farm is on efficiency and precise production management.

- We have a pen placing sys­ tem which requires that cull sows are collected at precise­ ly the right time. Our produc­ tion system does not allow for a sow to wait for several days before being collected, because a new sow is already waiting to take its place, says Stig Kristensen, who has now been running the farm for 16 years together with his brother­ Lars, who explains that they were tempted by Danish Crown’s offer of deli­ vering sows on trial.

13 Aug 2009

Previous experience

Empty pens, cheap grain and attractive financing are currently making for hectic activity at DC Member Ser­ vice. In fact, more and more members are calling to find out more about the new DC Settlement System at a time when Danish pig produc­ tion is slowly becoming more profitable. At SPF, which is responsible for just over one fifth of Danish exports, Man­ aging Director Peter Skov Madsen has noted the grow­

| Debate | 29

It was the first time that some of the participants had visit­ ed the slaughterhouse, such as Søren Andersen from Tommerup on Funen, who felt he learned a lot about classifying animals.

- I think it’s the long legs that make it hard to judge an ani­ mal correctly. Basically we look at the rump and back, explains Søren Andersen.

This was DC’s first classifi­ cation course, and there has been a lot of interest in all three events – in Tønder, Hol­ stebro and Aalborg. |

DC’s offer of inexpensive financing contributed to SPF’s decision to start producing pigs for slaughter again.

ing interest in buying piglets.

- When I talk to producers, they virtually all concur that cheap grain, the prospect of an improved economy and Danish Crown’s offer of in­ expensive financing are the reasons why they want to produce pigs for slaughter again, says Peter Skov Mad­ sen.

Increased earnings in sight

tion of pigs for slaughter in Denmark.

- According to recent infor­ mation from Danish Pig Pro­ duction, most farmers can increase their contribution margin per pig by up to DKK 150 in the current climate. All else being equal, this is likely to translate into an increas­ ing number of slaughterings ­later in the year, says Jacob Rasmussen. |

The brothers have previous­ ly delivered sows to Danish Crown, but three years ago decided to send the animals to Germany because Danish Crown’s collections did not tie in with their production plan.

- We had grown tired of the previous haulier because he wanted to collect the animals

The Kristensen brothers accepted the invitation to deliver sows to Danish Crown on trial, and the improved service persuaded them to return as sow members.

on different days of the week and at all times of the day and night. It meant that we had to tailor our production to his schedules, whereas I think we should show more consideration for each other.

Which is what I feel is being achieved with the new ini­ tiatives from Danish Crown, says Lars Kristensen.

Even before the trial period­ was over, the Kristensen brothers decided to become sow members.

- The improved level of ser­ vice has been a key factor in our decision, and in this con­ text it is not the price paid for the sows which carries most weight. Efficiency is every­ thing, they agree. |

Given the new trend, DC Member Service expects to see an increase in the produc­

Some of the pens which have been empty for a while are beginning to see signs of life again. SPF sees a growing interest in buying piglets, fuelling expectations that the number of slaughterings will increase slightly.

Flexibility and considerateness mean a lot for the Kristensen brothers’ production. They are back as members of Danish Crown.

30 | Debate | A cooperative with values

Farmers in the kitchen 19 May 2009 Danish Crown is unpacking the tents, polishing the woks and preparing for next sea­ son’s kitchen caravans which travel round to cattle shows, food fairs and the occasional festival.

- The smell of lemon, parsley and fresh vegetables will fill the air when we invite Danes inside our tents to cook and taste pork, veal and beef, says Kirsten Meisner, project coor­ dinator from Danish Crown at the start of the cattle mar­ ket season.

She says that Danish Crown’s members are good at strengthening customer relations, deciding to use a working day to act as ambas­

- WE MUST DELIVER ALL THE PIGS WE CAN 6 Apr 2009 In the south-western corner of Denmark, Klaus Rehse works as CEO of Tønder Kar­ tofler A/S, a potato producer. However, half the company’s revenue stems from extensive pig production distributed between three farms. Tønder Kartofler produces a total of 14-15,000 pigs for slaughter a year. This figure could be higher, but Klaus Rehse is unable to get his hands on enough piglets.

- It’s very hard to find a reliable supplier of piglets. We could easily boost production by a couple of thousand, but unfortunately many piglets end up in Germany, says Klaus Rehse with his distinctive German accent.

He qualified as an agricultural technician and comes from Wuppertal. About 20 years ago he settled in southern Jutland on a farm with about 1,200 pen places and 45 hectares of land.

Best in the world

- When I arrived in Denmark, there was no question about it. Danish pigs were the best in the world, and Danish Crown was the best cooperative. The Danish system was the envy of the world. It still is. And I get tired of people criticising and complaining the whole time, says Klaus Rehse, who recently attend­ ed a meeting at the head office in Randers with many other pig producers, and where he said, among other things, that the owners need to stand together in times of crisis.

- It’s a critical time, and we are all under pres­ sure. Some feel tempted to sell their animals in Germany to achieve a short-term profit.

But I think we risk jeopardising far more and eventually ending up with a system where we are all weaker in an opaque market, he says, adding: - We must therefore deliver all the pigs we can for operations to run smoothly at the produc­ tion plants. It keeps the costs per pig down and everyone benefits. |

Klaus Rehse, a pig producer, gives a dressing-down to all the producers who send their pigs to Germany. They should instead be supporting the Danish system.

- When I arrived in Denmark, it was a well-known fact that Danish pigs were the best in the world, and Danish Crown was the best cooperative.

sadors for the Group.

- To be able to tell visitors about the dishes and Danish Crown in general, a number of members have just been to a kick-off meeting to learn something about frying tech­ niques. However, they also need to be able to discuss everything from animal wel­ fare to the company’s overall strategies, says Kirsten Meis­ ner.

This is the third year that the interactive kitchen is taking to the road to illus­ trate that ‘It’s all about food’.

And it’s used for everything from events on dusty Jutland meadows to serving green sausages at the University of Copenhagen. And a lot else besides... |

advert

www.danishcrown.dk

[ affiliation ] noun, oft with/to Definition and use a group of people being closely associated, doing something together and thereby feeling a certain sense of togetherness; unions, associations of people, countries etc.; being together; in an association; jointly

32|

JOBS

The global workplace To achieve the objectives outlined in DC

Future, Danish Crown has to reduce payroll costs by 20 per cent. This calls for a joint effort, and positive discussions have been held with employees throughout 2009.

Two sides of the coin The employees are committed to DC Future, and many have suggested how habits can be changed and work routines made more effective.

The serious situation in which the company and ag­ riculture as a whole find themselves has been occupy­ ing people’s minds in Dan­ ish Crown over the past year.

Employees have shown that they realise that there is a dir­ ect connection between the crisis in agriculture, slaugh­ terhouse costs and work­ places.

When farmers are unable to expand and modern­ ise, it has consequences for, among other­ things, the de­ velopment of pig production, which grinds to a halt.

Fewer pigs – fewer jobs

This causes problems at a time when the number of

pigs for slaughter being supplied to Danish slaugh­ terhouses is falling. Fewer pigs also means fewer jobs for slaughterhouse workers, tradesmen and salaried em­ ployees.

During the year, this chal­ lenge has been particularly evident for all Danish Crown employees, who have posi­ tively embraced DC Fu­ ture and its implementation.

Based on agreements with employees at departments throughout Denmark, satis­ factory interim results have been posted during the first few months of the DC Future plan. A quarter of the object­ ive to reduce payroll costs by 20 per cent has been realised

by pressing on more than a 100 buttons around the com­ pany.

The measures include bal­ ancing line piece-work to increase efficiency, utilising framework agreements to the full and limiting piece-work wages paid to employees who do not perform piecework.

Technological assistance

It has also meant that activ­ ities and functions have been cut to the bone so that in some places it is possible to make do with two men instead of three. Where pos­ sible, technology has been employed, for example with automatic weighing.

- It’s imperative that we see through the DC Future plan in its entirety, says Kjeld Johannesen.

At 36 meetings across Denmark, Kjeld Johannesen has discussed the situation directly with employees.

All in all, this has led to a streamlining of every corner of the company so that Dan­ ish Crown is now even trim­ mer.

- By implementing these measures, we have come some of the way, and I am delighted that the employ­ ees have contributed, says Arthur Petersen, Production Manager.

minarbejdsplads@

Many employees have also taken it upon themselves to go through the company with a fine-tooth comb. So that employees can easily submit any good ideas they might have, Danish Crown has set up a ‘my workplace’ email address, minarbejds­plads@

danishcrown.dk, and it is obvious that lots of people are very keen to point out ar­ eas where they see scope for improvement. Suggestions are frequently being made about where and how Dan­ ish Crown can streamline and rationalise activities.

- It’s imperative that we see through the entire DC Future plan, says Kjeld Johannesen.

This means that, in the very near future, we must reach agreement on how we can fully meet the objective, i.e. cutting payroll costs by 20 per cent per kilogramme of slaughtered meat, says CEO Kjeld Johannesen, adding that this autumn will see in­ tense negotiations between the parties. |

The global workplace

| jobs | 33 advert

LOTS OF GOOD IDEAS 17 Sep 2009 Only a couple of hours after Danish Crown opened the new ‘my workplace’ email address – minarbejdsplads@ danishcrown.dk – on 17 Sep­ tember, the first suggestions started trickling in from em­ ployees on how to realise the objectives outlined in the DC Future plan.

The flow of suggestions has continued, both from hourlypaid and salaried workers.

Some of the proposals con­ cern very local conditions, while others look at factors affecting the entire company.

- I will be taking all the ideas­ which have been submitted with me to meetings with the liaison bodies, says CEO Kjeld Johannesen. |

SATURDAY SLAUGHTERING

When we slaughter on Saturdays in con­ nection with public holidays, it is inef­ ficient that only two lines are operating and that we only work until noon. The facility needs to be started up and has to be cleaned, so it might as well be run at full speed and without breaks while pro­ duction takes place.

re e h n a b o knife

N

MORE HEA

D If the h ead-cutt ing mac moved a hine nd cut off in the pigs’ heads w was re­ ere inste the cuttin ad they had g depart been saw ment aft er n in two probably , you wo ‘earn’ ab uld out 100-3 pig. Tha 00 t would add up to grams per gramme a lot of k s each w eek. Whe ilo­ on the fo n the me re-end, at sits the pric and it w e is diffe ould als rent, o save a The half vet per c heads w hain. ould als pack. o be eas ier to

CAREFUL CLEANING

Cleaning the slaughterhouse ruins a lot of electrical equipment because water is sprayed directly onto or very close to electrical instal­ lations. They are not waterproof, just splashproof. If people were slightly more careful, it would save a lot of money.

MONTHLY P AY

Pay wages once a mon th to all employees.

SAVE WATER

a water meter/ How about installing digital display flow meter? With a shbasins, shoe wa which can be read at other ­places. ny ma d an and boot washes n monitor how ­Employees could the in terms of water much they saved, both volume and cost.

DANISH CROWN BEST WORKPLACE FOR APPRENTICES Several thousand companies competed for the prize, but Danish Crown won the title of Denmark’s best workplace for apprentices.

28 Nov 2008 In November 2008 Danish Crown Sæby was voted best workplace for apprentices out of approx. 2,000 companies.

The award ceremony took place at Christiansborg, the seat of the Danish Parliament, where a representative from the Danish Ministry of Education presented the award to Søren Olsen, who is responsible for training apprentices in Sæby.

- I am slightly overwhelmed. I didn’t expect to win at all, and it is slightly surreal to come first in a competition which you have not entered yourself. The most important thing for me is that my apprentices have nominated me and feel that I do a good job, Søren Olsen explains.

A new life

Søren Olsen was put forward as a candidate for the award

by Rasmus Nielsen because

he feels that Danish Crown has given him a new chance despite his tainted criminal record. He produced six hand-written A4 pages describing his life so far, and how Søren Olsen, as the person responsible for apprentices, has helped him in a difficult situation. |

34 | jobs | The global workplace

DC EMPLOYEES TO RUSSIA DC employees from

FROM CASING CLEANER TO TV STAR 17 Oct 2008 The slaughterhouse in Hors­ ens had a TV star for a day.

Eighteen-year-old Kamilla Mathiasen is participating in the Danish Broadcasting Corporation’s TV youth pro­ gramme SKUM, where she describes what it is like to work in the casing cleaning department.

- It was slightly weird having a camera crew at such close quarters. They asked about the work and my plans for the future, and I think that everyone in the casing clean­

ing department had a great time, recounts the appren­ tice, who only has six months left before completing her two-and-a-half-year training as a casing cleaner.

Usually she is based at the slaughterhouse in Esbjerg, but because Horsens does not have any apprentices at the moment, Camilla was on loan for her TV appearance.

In 2008, almost 130 people are working in Horsens in the casing cleaning facility at the company DAT-Schaub, which has several depart­ ments in Denmark and ex­ ports casings worldwide. |

throughout Denmark will be teaching Russians about efficient slaughtering south of Moscow.

Danish Crown employees are much sought after in many places around the world. Their expertise is also used to provide other companies with knowhow.

Nine Danish Crown employ­ ees are heading for the Rus­ sian city of Belgorod 800 km south of Moscow to help provide Danish know-how for a brand new Russian pig slaughterhouse. The slaugh­ terhouse has been built, and has a capacity of 40,000 pigs a week, but its Russian own­ ers need help running in pro­ duction.

One of Danish Crown’s large Russian customers, Miratog,

100,000 VISITORS IN HORSENS 17 Jun 2009 At precisely 17:02 on 16 June 2009, visitor number 100,000 stepped through the doors at Danish Crown in Horsens. It was a group of visitors from the Danish Plant Directorate who got more than they bar­ gained for when they vis­ ited the slaughterhouse as employees from the custom­ er service department were ready to receive them.

- We have been looking for­ ward to this group for some time, but no one ever ex­ pected such an overwhelm­ ing level of interest in the slaughterhouse. Since the fa­

cility opened, we have had 25,000 visitors a year, and nothing suggests that this average is falling. There is still a 12-month waiting list if you want to visit in the evening, and just over four months for day visitors, says Vis­itor Manager Agnete Poulsen from Danish Crown in Horsens.­ The distribution of visitors to the slaughterhouses var­ ies greatly. Danish Crown’s owners, customers and con­ sumers normally account for many of the visitors, but at the moment we are seeing a lot of students, especially from the technical colleges. |

24 Nov 2008

From Blans to Belgorod and back

Harry Damm works daily as an instructor and journey­ man cutter in the streaky ­bacon department in Blans.

He is one of several em­ ployees travelling to Rus­ sia, where he will supervise employees in the deboning

department at the slaughter­ house in Belgorod.

- I’m sure it’ll be a memor­ able experience. It’s a big challenge professionally, and we get to know a complete­ ly new culture, says Harry Damm in November 2008.

The Danish team has three months to get the slaugh­ terhouse running smoothly.

They return home briefly at Christmas, but leave again after New Year before com­ ing back at the end of Febru­ ary 2009. |

GREEN SMILES AT ALL PORK SLAUGHTERHOUSES All Danish Crown slaughterhouses now boast environmental certification.

6 Jan 2009

Visitor number 100,000 to the slaughterhouse in Horsens came from the Danish Plant Directorate. He went home with a pig-themed gift after a memorable trip. There is still a lot of interest in visiting the world’s most modern slaughterhouse.

has asked DC for assistance with running in the produc­ tion equipment, and lots of employees have been inter­ ested in helping out.

The certification of the slaughterhouses in Hors­ ens and Skærbæk just before New Year marked an import­ ant milestone for Danish Crown’s environmental ac­ tivities. All Danish Crown’s pork slaughterhouses have

now been certified as visible proof that they are managing both the environment and the working environment.

- It’s quite a big process for each slaughterhouse. Every­ thing has to be mapped, and detailed plans need to be drawn up for the environ­ mental activities – both now

and for the future. How­ ever, it has been a very posi­ tive process, and every time we have started with a new department, the employ­ ees have shown tremendous drive, says Charlotte Thy, Danish Crown’s Environ­ mental Manager. |

The global workplace

| jobs | 35

HONOURED FOR SAVING SOMEONE’S LIFE

- I was just pleased that I was able to help, says Torben Lyngsø, who in March 2009 was honoured by Danish Red Cross for saving a colleague’s life.

Good morning

See you tomorrow!

12 Mar 2009 In March 2009, the union rep­ resentative at Danish Crown in Ringsted, Torben Lyngsø, was named First-Aid Helper of the Year 2008 by the Dan­ ish Red Cross. Together with the award, he was present­ ed with a cheque for DKK 10,000.

- Saving another person’s life is not something you do for the money. I was just pleased that I was able to help. But it’s nice that other people ap­ preciate what I’ve done, says Torben Lyngsø.

How are you?

Torben Lyngsø received the award for what he did on 10 March 2008 when his 26-year-old colleague, Mikal Borkowski, accidentally cut himself in the groin while removing plucks. His fem­ oral artery was cut and blood streamed out of him, but Torben Lyngsø acted swiftly by pressing two fingers into the wound to stop the severe bleeding. Torben Lyngsø ac­ companied the patient in the ambulance and all the way into the operating theatre before removing his fingers.

It saved Mikal Borkowski’s life. |

I’m fine

SIGNS OF UNDERSTANDING Five deaf employees have had the silence broken at their workplace. Their colleagues have learned sign language, so now everyone is able to talk to one another.

11 Mar 2009 They speak with their arms, hands and fingers. Almost si­ lently, they move their lips, signal with their eyes and nod their heads. They under­ stand.

In March 2009, 15 employ­ ees from the slaughterhouse in Horsens meet once a week to learn sign language. It has enabled them to better under­ stand their deaf colleagues in a new and visual world.

- I know my deaf colleagues much better now because I can communicate with them.

For example, I know their family relations. I know they have wives and children, and other basic facts. I didn’t know that before because it was far too difficult to find out, and it obviously means a lot if you want to under­ stand people, says Michael Skov Jensen, spokesman in the front part section.

Did not communicate with one another

He is one of 15 employees who have started to learn sign language. He has spent three years working in the same section as his two deaf colleagues without even ex­ changing any general infor­ mation about each other. Be­ cause it felt awkward to try and much easier to avoid doing so. But thanks to the course, the ‘silence’ has now been broken.

- Just being able to ask “How are you?” creates a complete­ ly different atmosphere. It’s not something we’ve done before, says Michael Skov Jensen.

There are five deaf employ­ ees at the slaughterhouse in Horsens, and two of them are giving the lessons in sign lan­ guage. |

36 | jobs | The global workplace

back IN WORK PROUD IN NYKØBING MORS Despite the economic crisis, by far the majority of employees are back in work after the closure in Nykøbing Mors.

26 May 2009 Only 29 of the 317 employees from the Danish Crown de­ partment in Nykøbing Mors are still without a job accord­ ing to figures from the job bank, which had its last open­ ing day on 22 May. The Nykøbing department closed in August 2008. Some of the former employees have started work at other Danish Crown departments, but most have found work locally. Eight have enrolled on courses or study programmes, and four have taken early retirement.

- We are quite proud of this, all things considered. Only a month after the closure, everything came to a standstill in the general economy, so this is a good result, says former union representative Asbjørn Mikkelsen.

New jobs for job bank managers

Asbjørn Mikkelsen has run the job bank together with his colleague Lene Toft. And their work has not gone unnoticed in the local area. Two local workplaces were soon in touch to secure their competencies. Asbjørn Mikkelsen has been recruited by the AOF course cen­ tre Morsø Daghøjskole, while Lene Toft has been em­ ployed at the job centre in Thisted, which means that both of them are continuing to help others to find jobs.

- I’m really looking forward to it, as the department is be­ ginning to feel a bit deserted. And, of course, it’s not that different from what I’ve been doing for the past year. Now I’ll continue to have the personal contact with people who, through interviews and cooperation, need help finding new work, and that’s something I like doing, says Asbjørn Mikkelsen. |

QUICKLY FOUND WORK IN HURUP In north-western Jutland, only four employees remain in the job bank in Hurup, so a satisfied job bank manager feels happy about shutting up shop.

5 Nov 2008 - Slaughterhouse workers are a great bunch of people.

They are unstoppable, and simply knuckle down and get on with their lives, says Dan Sørensen, former union rep­ resentative and job bank manager at the slaughterhouse in Hurup, with a big smile on his face. And he has every reason to be happy. Only seven months after the job bank opened at the slaughterhouse in Hurup, he has helped 147 of his former colleagues at the slaughterhouse to find new work. Which leaves only four who are still unemployed.

- It has been a great success. Most of my colleagues soon found new work. But, of course, it’s not what it was like compared to six months ago, he says.

Different jobs

The task of being a helping hand for his colleagues is one that he has taken very seriously. On 31 March 2008, the em­ ployees were reluctantly told that Hurup would be closing on 20 June 2008 – and the next day he started looking at the paperwork.

- I drove round to local companies and told them about my colleagues. Most of them are now scattered around factor­ ies throughout Thy, while 30 have ended up at the window manufacturer Idealcombi, reports Dan Sørensen in Octo­ ber 2008.

Other employees have decided to take an HGV driving test and found work as drivers, and one, who was a qualified accountant, has started his own business.

- I have relished the experience, and it has been an interest­ ing challenge even though it is a job which I would obvi­ ously rather not have had to do. |

More and more Danish Crown employees are choosing to continue working even though they could hang up their tools and stop doing the physically demanding work for ever. This is a trend which follows the latest figures from Statistics Denmark showing that fewer 60 to 62-year-olds are taking early retirement.

SLAUGHTERHOUSES’ GREY GOLD

20 Oct 2008 Knud Frandsen has been with Danish Crown for 27 years, and he was given the seniors job as a service assist­ ant when he moved from the old slaughterhouse in Hors­ ens four years ago.

- It’s a fantastic job with a great mix of tasks and plenty of challenges, so no two days are the same. I have been wearing a pedometer, and I walk about 14-18 km a day.

Knud Frandsen has always liked his workplace and been trained by empathetic ­people.

- I've no idea how long I'll keep on working. One day I’ll probably start to feel that I can’t keep up, and then I’ll stop. But so far I haven’t met anyone who can beat me, he says with a smile.

Creating the right spirit

The older employees are also highly regarded by the fac­ tory managers, who would like them to stay on longer at the slaughterhouses.

- They’re worth their weight in gold for the factory be­ cause we know we can count on them and they make a valuable contribution to the very character of the slaugh­ terhouse. We do what we can to offer them less strenuous tasks, but such jobs are in high demand. We therefore have a senior policy which means that we hold talks with individual employees to find the best solution, ex­ plains Leif Brøndum Nielsen, Factory Manager in Sæby. |

As a service assistant, I walk 14-18 km a day and so I’m fitter than most. When you are fit and healthy, you have a ­duty to work, believes 63-year-old Knud Frandsen from Horsens.

advert

Have you talked to your job bank today?

19 Feb 2009 Danish Crown looks after employees affected by job cuts.

In connection with all company closures, Danish Crown’s social plan is there to help all those made redundant.

Successful initiative

As part of the social plan, Danish Crown earmarks a sum for each employee. In collaboration with the employees, job banks are set up to help the employees find new jobs, and this has

been a successful initiative.

Also, employees are offered an interview to clarify their possible job wishes. Experience has shown that many seize the chance to update their academic qualifications in general or sign up for vocational courses, for example taking a truck or lorry driving licence.

Started a training course

Others embark on a completely different career path, as did

46-year-old Aage Sørensen who, after working at the Danish Crown slaughterhouse in Vojens since 1989, has been training to become a prison officer after the slaughterhouse closed down last year.

- Of course it is frustrating when your workplace suddenly closes, but for me it meant that I decided to do this training course. I saw it as an opportunity to try something new, explains Aage Sørensen in February 2009.

Others have taken the leap to become social and health ser­vice assistants, teachers or even greenkeepers.

The job banks, which are managed by union representatives and open for nine months, also advertise job vacancies at other companies. |

Despite a hard-pressed labour market, most of the slaughterhouse workers made redundant managed to find a job in 2008.

87 PER CENT BACK IN WORK AFTER CLOSURES • Two facilities have closed – the pig slaughterhouse in Holstebro and the cattle department in Gimsing • Moreover, Rødding has been warned that it will close during 2010 • Also, three departments have been shut down at the cattle slaughterhouse in Holstebro, the sow slaughterhouse in Skærbæk and the pork slaughterhouse in Esbjerg • In total, 732 employees – slaughterhouse workers, tradesmen and salaried employees – have been laid off during the year • In addition to these are the 308 employees in Rødding, of whom a third have left the department for new jobs • In total, 87 per cent of employees at the closed factories and departments have found new work or have started a training programme, or they have taken early retirement or retired • Out of the 87 per cent made redundant, 35 per cent have found new jobs within the Danish Crown Group, and 65 per cent with other companies

38|

Culture Butcher Christiansen

Bringing DC quality home Some of Danish Crown’s product

development takes place in cooperation with the best butchers in Denmark.

Inspiration flows both ways, and the development of special cuts rubs off on consumer choice in the cold counter.

Butcher Baagø

Leif Broe (top right) Peter Broe (bottom left) Mogens Koppel (bottom right)

A GOOD TALK ABOUT HAMS 10 Sep 2009 - I need to cut here while you lift the rear leg. Then the membrane remains where it is and helps to hold the meat later in the process.

Butcher Munch from Skagen is dishing out instructions.

He is paying a visit to Dan­ ish Crown in Esbjerg, and passing on useful advice to another butcher, Poul Erik Lindsted.

- I keep my ears open when it’s a master butcher who’s speaking. And then it’s good with the direct contact so we cover all the details, says Poul Erik Lindsted, who is part of the team that debones the 87 hams which are sent to Skagen every week.

Started from scratch

Jens Munch started experi­ menting with hams back in the mid-1990s. Today his Skagen hams are acknowl­ edged as a Danish speciality.

- We started off with nothing, and we hardly knew any­ thing. So I went on a study trip to Italy to learn some­ thing about the craft. I trav­ elled around and tasted and absorbed knowledge, recalls Jens Munch.

Danish Crown’s website features a special section where visitors can read more about the butchers, find recipes and watch ‘Butcher TV’, which introduces the butchers in brief video clips.

Visit www.gourmetslagter.dk

87 hams a week

In 2001, Jens Munch start­ ed buying whole hams from Danish Crown, and since 2007 he has bought them deboned. They are all careful­ ly selected and marked with a large X. In the cold store they hang side by side with extra space around them to ensure optimum cooling.

- The hams go through a long, 14-month process, and we have them in our hands as many as 25 times. We start with the world’s best meat, and possibly end up with one of the world’s best hams, says Jens Munch with a twin­ kle in his eye. |

Christian Maltesen

Jørn Lindhardt

Slagter Munch

We have to stand out Jens Munch, who owns the well-known butcher’s shop Slagter Munch in Skagen at the northern tip of Denmark, suggested the collaboration.

- We are doing this for the sake of our customers, be­ cause as private butchers we need to do something to stand out. Some people focus more on volume and price, but we have decided to con­ centrate on finding quality products which we can sell with a clear conscience and which are unavailable else­ where. For example, we have decided on rules for how long the meat must be aged.

It is also important for us that it is Danish meat we use, says Jens Munch.

New products

The collaboration means that new products are continu­ ally being developed, while the butchers are also able to access Danish Crown’s ‘Gold Store’ in Kolding.

The Gold Store acquired its

name on account of the spe­ cialist products it contains.

- In the past, many of us prob­ ably thought that Danish Crown only dealt in bulk and large consignments, but this is not the case at all. The com­ pany goes to great lengths to find just the right cuts and products we are looking for, says Jens Munch.

Involved in developing several products himself

- I started out collecting heavy pig hams from Dan­ ish Crown which I use for the Skagen hams. Right now we are working on a special short loin which is slightly fatter and which has aged for a minimum of five weeks on a hook. It is our answer to the Japanese Kobe meat, and our tests have shown that the products closely resemble each other, but that custom­ ers prefer the flavour of our short loins. They also happen to be much more attractively priced, says Jens Munch. |

Bringing DC quality home | Culture |

39

Love in a cold store The collaboration between ten of the very best butchers in Denmark, Friland and Danish Crown got off on the right track during 2009. After a tentative start, the gourmet butchers are now cooperating closely in an effort to promote the outstanding traditions that distinguish the Danish butcher’s trade. The collaboration involves sharing inspiration and experience. The gourmet butchers and Danish Crown meet several times a year to discuss meat, quality and skills old and new.

Jens Bertelsen

Loves the delicacies At the heart of Holstebro lies one of the oldest butcher’s shops in Denmark. Today it is run by Jens and Peter Ber­ telsen.

Jens Bertelsen is the fourth generation of the family to manage the 105-year-old shop. He is one of the ten members of the ‘Gourmet­ slagterne’ network, and is particularly enthusiastic about the special cuts from Danish Crown.

- It’s no secret that we work with a number of suppli­ ers, but the products we buy from Danish Crown are gen­ erally very good. The niche products from Danish Crown are what primarily make the difference. We love the many

delicacies which they come up with, says Jens Bertelsen.

Among the special products supplied by Danish Crown are leg of pork with barbe­ cue marinade, special mid­ dle cuts, hams, streaky bacon and legs. The streaky bacon is more meaty than normal, and Jens Bertelsen skilfully turns it into a popular and tasty rolled meat sausage.

He also uses the cut to make an outstanding home-made brawn.

- When we want something special, we always receive very good cuts. This makes working with the meat easier and, of course, also benefits our customers, says Jens Ber­ telsen. |

Peter Mortensen

It’s more professional Six years ago, Peter Mortensen followed in his father’s footsteps and took over the butcher’s shop Slagter Mortensen in Lem­ vig. Peter Mortensen likes doing things himself. Both in the shop which is overflow­ ing with home-made prod­ ucts, and when buying meat.

- I am therefore incredibly pleased with my collabor­ ation with Danish Crown; we can have just about any sort of meat we want, says Peter Mortensen.

He mentions the meetings with the other butchers who are members of the network where they exchange experi­ ence and bounce off ideas for new products. For example, they spent a whole day in the kitchen together to develop new recipes based on their own products. The result is a book of recipes which the gourmet butchers hand out in their shops.

- It’s good to have something nice to give customers apart from our products, says Peter Mortensen.

He is slightly surprised that, as a small butcher, he has been able to influence prod­ uct development and han­ dling in Danish Crown.

- Getting under the skin of such a large organisation is just perfect. It’s a gigantic group, but even though I’m a small butcher, I’m invited in­ side and can present my spe­ cial wishes and requirements, says Peter Mortensen.

- It’s simply a more profes­ sional way of doing things, Peter Mortensen concludes. |

Dennis Karlsen

New possibilities opening up On the northern outskirts of Odense, Fjordagerslagteren has since 1981 supplied an extensive range of high-qual­ ity products combined with a large selection of ready-made menus.

Dennis Karlsen is the propri­ etor of Fjordagerslagteren.

He is a member of ‘Gour­ metslagterne’ and buys all his pork and most of his beef from Danish Crown.

- All of a sudden there are all these opportunities which I didn’t realise existed. I just didn’t know that so many services were available to the small butchers. If that wasn’t the case, I wouldn’t have been buying their products, says Dennis Karlsen. He val­ ues the professional and so­

cial aspects of being part of the group of gourmet butch­ ers.

- It has also made it possible to do things together with colleagues, which is very nice. We are coming up with novel ideas all the time. We have just developed a pork Tbone, and in the past we have produced a special beef short loin cut and lamb specialities, says Dennis Karlsen.

At the end of the day, the big test is in the shop where quality-conscious con­ sumers have been enthu­ siastic about the initiative.

- The book of recipes which we have made together has been a tremendous success.

Our customers love that sort of thing and associate us with gourmet products, says Den­ nis Karlsen. |

40 | Culture | Bringing DC quality home

MEAT SCIENTISTS:

GOOD QUALITY Meat scientists had a tasty experience when Danish Crown hosted the ICoMST congress in Copenhagen in August.

19 Aug 2009 In August, 400 meat scientists gathered for the Internation­ al Congress of Meat Science and Technology in Copen­ hagen. And they didn’t just talk about meat. The scien­ tists had a real hands-on experience when Danish Crown hosted a meat experi­ ence out of the ordinary. Jap­ anese, Canadians, Koreans and Bangladeshi participants gathered around the pans where tender veal steaks and juicy pork chops were being carefully prepared.

- It must be cooked just right

Theory is one thing – practice is another. This was felt by the meat scientists from all over the world as they occupied Danish Crown’s kitchen during the meat congress.

One group of five scientists had declined any salad to leave enough space for their pork chops.

- We are here for the meat, said Daniel Westgeest, a meat sci­ entist with a broad Canadian accent. In their view, there are several factors which make for a really good piece of meat.

Ross Clark from New Zealand kicked off: - It must be tender.

- And juicy, added Brad McLeod from Canada.

- My words exactly. Oh, and the taste must be just right, said Caroline Mitchell from the UK.

FLYING hotdog SALES at Cph 10 Feb 2009 If there is anything Danes miss after a trip abroad, it’s a hotdog with all the trim­ mings. Steff Houlberg there­ fore has hotdog stands in four of the six terminals at Copen­ hagen Airport. Two of them are run by Lars Bech, and he has gone to great lengths to ensure that customers en­ joy sinking their teeth into a Danish sausage.

- When people return home to Denmark after a trip abroad, it’s something of a

tradition for them to eat a hotdog. I often find that peo­ ple have really missed being able to eat a genuine Danish sausage even though they haven’t been away for more than a week, he says. Last year, the four Steff’s Place shops served more than 660,000 sausages. |

There is nothing quite like a hotdog with all the trimmings after landing back in Denmark, something which the airport hotdog stands know full well.

Daniel Westgeest looked down at his plate where a small piece of rind was left.

- I would say that the right fat marbling makes a good piece of meat.

- And then, said Ken Jakes in concluding the definition, it must be cooked just right.

Tasty, tender and juicy

The five scientists agreed that the beef tenderloin which they had just eaten fully lived up to their idea of what con­ stitutes good meat.

- It was tasty, tender and juicy.

And it was just the right tem­ perature – also inside, said Ross Clark, before joining the others to get a pork chop. |

Bringing DC quality home | Culture |

FROM DANISH CROWN

41

Beef, veal and pork were barbecued when meat scientists were invited to cook under expert guidance in Danish Crown’s kitchen, which had been set up specially for the occasion in the gardens at the University of Copenhagen’s Faculty of Life Sciences.

Nationalities and differences were ironed out when everyone was handed a Danish Crown apron for wearing in the kitchen.

FIERCE BATTLE BETWEEN THE COLD COUNTERS An internal competition

STARS SHOWER DOWN ON THE STAR ROUTE 18 Mar 2009 The new Michelin guide of the biggest cities in Europe awards 13 stars to res­ taurants in Copenhagen, which still boasts more stars than any other Scan­ dinavian city in this prestigious pub­ lication. Four of the Danish Miche­ lin restaurants are included in Danish Crown’s ‘star route’. The four restau­ rants are Formel B, Geranium, Kong Hans Kælder and Søllerød Kro. For several years, Danish Crown has been collaborating with some of the best chefs and restaurants in Denmark.

For example, the company supplies meat to more than 30 gourmet restau­ rants, many of which are included on the ‘star route’ on Danish Crown’s Dan­ ish website. |

between all Kvickly and SuperBrugsen supermarkets has tripled Crown of Cooking sales.

13 Jul 2009 During weeks 19-26, there was a battle going on in the cold counters at 351 COOP supermarkets. Danish Crown launched an internal compe­ tition among the competing supermarkets, and the win­ ner was SuperBrugsen in Farsø. Three prizes were at stake, all of them a barbecue evening for the butcher’s de­ partment.

- We’re delighted with the re­ sult, and I know that out in the shops they have thrown themselves into the mission, using their creativity and grocery skills to compete against their colleagues, says Sales Manager Torben Ped­ ersen from Danish Crown’s Domestic market depart­ ment.

- We want to put an end to bad fast food and boring dishes and instead offer qual­ ity and delicious flavours. We want to offer new and tasty products and serving sug­ gestions using meat in mul­ tifarious ways. Good food

and high-quality ingredients are needed again, even when we have to prepare meals in a rush, says Torben Pedersen.

Today there are six perma­ nent products in the range, with two to four products be­ ing added each year. |

Multi-faceted meat

Crown of Cooking is a series of products created by Dan­ ish Crown in collaboration with leading Danish and in­ ternational chefs.

The Crown of Cooking range is the result of cooperation between some of the best chefs in Denmark and Danish Crown.

42 | Culture | Bringing DC quality home

With an expert air, star chef Francis Cardenau assesses extra aged beef which will be served in the exclusive Copenhagen steakhouse MASH.

Possibly the best beef in the world - We have the very best meat in Denmark. In fact, possibly the world. It’s fantastic that Danish cattle producers can produce meat of this quality from cows which basically only eat grass.

Star chef Francis Cardenau

Bringing DC quality home | Culture | A stone’s throw from Kon­ gens Nytorv lies one of the city’s hottest restaurants.

At the address Bredgade 20, ‘MASH’ can be seen in large letters above the door. Some people may come to think of the American TV series of the same name, but then it was an acronym for Mobile Army Surgical Hospital.

At the restaurant in Bred­ gade, MASH means some­ thing else, explains Fran­ cis Cardenau. Here it stands for Modern American Steak House.

- We have the best meat in all of Denmark. Possibly the whole world. It’s fan­

tastic that Danish cattle pro­ ducers can produce meat of this quality from cows which basically only eat grass, says Francis Carde­ nau, who opened MASH in April together with his two colleagues, Jesper Boelskifte and Eric Gemal Witting. The three of them also own the restaurants Le Sommelier and Umami.

Deliveries from the Gold Store

Every week, MASH takes de­ livery of 35 short loins from Danish Crown’s Gold Store in Kolding. The Gold Store is a cold store where the best

In Danish Crown’s special cold store – the ‘Gold Store’ – some of the best chefs in Denmark select their meat.

restaurants and chefs in Den­ mark can have meat stored and aged according to indi­ vidual wishes. The meat is selected according to Francis Cardenau’s exacting criteria and then aged for 90 days.

Hence the name Danish Dry Aged.

- The first six months have gone really well. We’ve been getting good feedback, espe­ cially for our Danish meat which is extremely tender, slightly sweet and succulent thanks to the time it’s been allowed to age. And we are already getting enquiries from several places around the world about the qual­

ity of our Danish meat, says Francis Cardenau.

For all to see

The premises were previous­ ly occupied by an art gallery, Galleri Asbæk, but have been converted in a style which is reminiscent of a slaughter­ house. With tiled walls, sub­ dued lighting, red carpet, and seating upholstered in red leather and carefully cho­ sen, soft American jazz tones.

Visually an up-to-date diner from the 1950s. In the middle of the long aisle which runs between the café and the ex­ clusive restaurant – adjoin­ ing the kitchen – is a glass

The beef for MASH is aged for 90 days. It is called Danish Dry Aged and kept in the Gold Store.

display cabinet with whole short loins and various cuts.

- This is our cold store, but also a presentation tool. We use it to tell customers about Danish Dry Aged meat and the various cuts we serve, says Francis Cardenau.

The American way with a twist

The menu is very straight­ forward. The dishes primar­ ily consist of steaks ranging in size from 200 grams to a massive 1200 grams, as well as chicken and fish. If you are vegetarian, this is not the place to visit to appease your appetite.

43

- We have concentrated on steaks, inspired by our study trips to the best steakhouses in the USA. But I have added a bit of a twist to our dishes – primarily from French and Danish cuisine. Together they create a Danish brand which we want to market world­ wide as possibly the best meat in the world, says Fran­ cis Cardenau with a smile.

Read more about MASH at www.mashsteak.dk. |

The chef Francis Cardenau selects the meat according to his own quality criteria.

WORLD CLASS IN FINDERUP LADE 20 Jan 2009 The frost sits like gunite in the fields leading down to the bog. The sun has just crawled up over the tree­ tops to the south and casts its strong light on the jet-black bodies. As many as 140 cat­ tle are standing in the fields outside Finderup Lade. All of them are Angus. And several of them have won prizes. In the housing, in their own en­ closure, are eight calves. Den­ mark’s only genuine ‘Black’ Wagyu calves, who were all born last year around mid­ summer.

Denmark’s first genuine Japanese Wagyu cattle are living in Finderup Lade, where eight calves are waiting to explode the scale for succulence, flavour and tenderness.

Collaborating with the chef

Together with Friland and the chef Francis Cardenau, Søren Vester started establishing Denmark’s first Wagyu herd in autumn 2005.

- The meat really is special.

The fat marbling is com­ pletely unique and produces a meat which explodes the

scale for succulence, flavour and tenderness. And this is why it produces world-class meat – also in terms of price, explains Søren Vester, who has decided to supplement the concentrated feed with mash from Viborg brewery, whole-crop barley and si­ lage, which has helped to en­ sure optimum growing con­ ditions.

An expensive thoroughbred steak

In about 20 months, the first steak will be served at the Co­ penhagen restaurant Umami, which is owned by Francis Cardenau, among others. But Søren Vester is unwilling to hazard a guess as far as the price is concerned.

- Normally a good steak costs about DKK 1,200 here in Den­ mark. But that is meat that comes from a cross between Angus and Wagyu. So I dare not try and predict what the final price will be for a gen­ uine Japanese thoroughbred Wagyu. |

44 | Culture | Bringing DC quality home

Prized meat Tulip Ltd named best British sausage producer 11 Dec 2008 Tulip Ltd in Peckham, London, where sausages for the UK market have been produced since 1954, decided to make a sausage – but only for the London market.

In autumn 2008, the Original London Banger was intro­ duced. It quickly proved a great success when, soon after the launch, Tulip Ltd was named sausage producer of the year by the British Sausage Appreciation Society. Original London Bangers are only sold in the London area. |

Good prices = good sales 9 Jul 2009 First the Danish consumer magazine Tænk named Crown of Cooking’s ap­ ple/thyme sausages and GØL’s bar­ becue sausages as the summer’s best sausages, and then TV2’s morning programme Go’Morgen Danmark also joined in the praise.

This immediately prompted extra orders for the two sau­ sage varieties. The same morning – on Thursday 25 June – at about 10 am, the telephones started ringing at Tulip in Svenstrup. Buyers from the Danish retail chains had also seen the programme, so more sausages were needed on the supermarket shelves. From one day to the next, sales in­ creased from 400 kg to 700 kg. |

No. 1 in Greece 12 May 2009 Danish young bulls from Danish Crown have just won an outstanding first place in a blind tasting carried out by the Greek supermarket chain Sklavenitis. In a tough competi­ tion with animals from eight Dutch, German, French and Danish producers, the meat from Danish Crown’s young bulls tasted by far and away the best, according to the ­panel of 20 judges.

The competition took place in Athens in early May, and in addition to the honour of winning, Danish Crown can use the title to market its Danish-produced veal. |

Danish Crown is wholesalers’ favourite

Food cooked Viking style. Danish Crown supplied the raw ingredients when the chef Søren Gericke cooked food out in the open at Moesgård.

28 Apr 2009 Factum has asked more than 20 of the biggest Danish wholesalers to judge food suppliers against a number of criteria. Here, Danish Crown Foodservice came first in the category ‘Groceries/fresh foods’. This is a leap of three places from fourth place in 2007. Overall, Danish Crown is now in second place among all Danish suppliers. In 2007, the company came ninth. |

AND then IT TASTES LIKE a bite of HEAVEN…

best bottom round roasts

13 Nov 2008

16 Apr 2009

Surrounded by autumnal smells and hues, food was cooked as the Vikings would have done it. Outside over an open fire. The chef was called Søren, the venue was Moes­ gård Museum, and the meat was from Danish Crown.

- The Vikings ate much bet­ ter than we assume. Pretty much as we eat today. Many people think they ate a lot of game, but they didn’t. The game belonged to the king.

They loved a tasty joint of beef, chicken and ate masses of pork. And they were also fond of richly flavoured boar,

Danish Crown’s Beef Division is behind three of the bestplaced beef bottom round roasts in a large test recently published by the daily newspaper Jyllands-Posten. The test’s top scorer was Fakta’s beef bottom round roast, which comes from the Beef Division’s department in Hu­ sum in Schleswig-Holstein. The bottom round roast scored 5.5 points out of a maximum of 6.0, and was highly praised by the panel of judges. “...in addition to many appreciative noises, it was also de­ scribed as delicious, very tender and particularly succu­ lent,” writes Jyllands-Posten in April.

Aldi’s Landlyst bottom round roast ranked second in the test with a score of 5 out of 6. This comes from Danish Crown’s Polish subsidiary Sokołów. Irma’s Danish bottom round roast, which also featured near the top of the list, is also supplied by Danish Crown.

which had foraged around in the forests or been fed with leftovers from the Vikings’ meals, tells the chef Søren Gericke, who participated in the extension of Moesgård Museum’s food series – Food with History.

DC can deliver the lot

Søren Gericke was keen to work with the Vikings and contacted Danish Crown to hear whether the company would sponsor the meat.

- Today, Danish Crown can deliver the lot. Delicious, uni­ form and tasty meat, and I therefore received forelimbs, jaws, chuck steak and the

As Søren Gericke had to prepare the food in true Viking style, he knew who to go to for the meat – Danish Crown of course.

best diced meat I have seen for a long time. I was huge­ ly fascinated with the splen­ did cuts, says Søren Gericke, adding: - And for the Vikings, it must almost have tasted heaven­ ly… |

advert

www.danishcrown.dk

[ trust ] noun, uncount.

Definition and use reliance on and confidence in the truth, worth, reliability, etc., of a person or thing; faith.

46 | Culture | Bringing DC quality home

100% DANISH TASTE OF BORNHOLM 1 Oct 2009 When the Kvickly super­ market sells a pork neck roast, a packet of pork chops or minced pork, the meat increasingly comes from the island of Bornholm. ­Only 18 months after the Bornholmer pig was introduced, it is proving so popular that in autumn 2009 Kvickly, in collaboration with Danish Crown, is boosting production of this favourite ‘happy’ pig by up to 20 per cent. The Bornholmer pig has become the fastest-growing introduction in Kvickly’s premium range.

Knowledge at your fingertips

A proud island

- It’s up to our customers to decide whether or not a new initiative such as the Bornholmer pig is a success. And here it has surpassed all expectations. Based on the feedback we have received, the Bornholmer pig wins hands down in terms of taste, tenderness and succulence, says Danish Crown’s Sales Manager Torben Pedersen.

However, it’s not just the consumers who like the pig. The people of Bornholm have also embraced the animal.

- The whole island is proud of the pig, and farmers are queu­ ing up to be part of the concept, says Torben Pedersen. |

FESTIVAL-GOERS LOVE BLUE TINS 8 Jul 2009 Sales of Faaborg liver pâté exploded in Roskilde when hungry festival-goers invaded the city.

- If you compare figures with week 22, sales of Faaborg liver­ pâté in one of the three Fakta supermarkets in Roskilde­ have exploded from eight tins to 1,574, and sales have also risen appreciably in the other shops, says Tulip Food Com­ pany’s Sales Manager John Riber Nielsen with a smile.

However, it is far from just festivals and camping holidays that explain the popularity of the pâté which comes in dis­ tinctive blue tins. Recently, head of security at Copenhagen Airport, Johnnie Müller, revealed to the Newspaq news agency that tinned liver pâté is confiscated daily from Danes wanting to take it with them on holiday. |

DC MEAT FOR ROYAL CHRISTENING 22 Jul 2009 Marsk Lamb from Danish Crown was on the menu when 140 guests sat down to celebrate the christening of the new baby prince in Møgeltønder in southern Jutland.

- We composed a menu largely based on local ingredients, and one of the main dishes was medium rare back and leg of Marsk Lamb with ratatouille, chanterelles and cold potatoes, says F&B Manager John Amstrup from the inn Schackenborg Slotskro. Meat from the Schackenborg beef herd, which is part of HRH Prince Joachim’s production, was also served at the christening. Schackenborg beef is sold as part of the ‘Mad Med Mere’ butcher’s chain and distributed by Danish Crown’s subsidiary Friland. |

CLASSICS FOR MODERN CONSUMERS 4 Sep 2009 It looks and tastes like food which your grandmother made from scratch. However, the needs of modern consumers are also considered when 100% Danish launches a brand new product in week 36 – ‘Syltepakken’ – which contains all the ingredients for a delicious ‘sylte’ or brawn.

- Our analyses show that modern consumers only have a limited time to spend in the kitchen. So now we are en­ suring that you can make your own brawn in just 15 min­ utes plus the time it takes for it to boil and cool down. It couldn’t be easier, says Torben Pedersen, Danish Crown’s Sales Manager.

Danish Crown is launching another two products in the 100% Danish range – two different types of meat loaf.

- We can see that many traditional dishes are making a comeback, and these two dishes tie in well with this trend, says Torben Pedersen. |

Randers, 24 August 2009 - When frying meat, it is a good idea to take it out of the fridge a quarter of an hour beforehand.

Karen Nikolajsen looks at the participants, who are ready with their frying pans. In front of her are six pieces of meat.

- Traditional pork, organic pork, Bornholmer pork, veal, beef and Angus beef. Meat is not just meat, says Karen Nikolajsen, pointing to each piece.

She is at EAT 09 as part of Danish Crown’s mobile kitchen, where visitors are able to experience goodquality meat.

Myths shattered

She sprinkles salt on the meat, and in so doing busts the myth that it dries out the meat.

Everyone is given a piece of meat to fry themselves.

The meat is placed in a mix­ ture of rapeseed oil and but­ ter in a smoking hot frying pan. It then has to be fried for 30 seconds on each side. ­People turn the meat and look up at Karen Nikolajsen,

who explains away miscon­ ceptions and provides useful advice.

- Now turn down the heat.

The pork chops need to be fried for one minute per side per centimetre.

And once the beef starts ooz­ ing juices, you know it’s cooked, says Karen Nikolaj­ sen.

New experience

Each person looks down at the sizzling piece of meat in front of them.

After a few minutes the meat is fried to perfection, and the discussion continues at the table while everyone samples the different meats.

One of the participants, Rie Borg, has cooked for many years, but has nevertheless learned something new and laid many myths to rest.

- That was a neat trick, mak­ ing a cut in the back of the meat to see whether it’s ready.

I’ll remember that ­every time I fry chops, she says.

New at the MAD fair in Aarhus

When the MAD food fair opens its doors at Ridehuset in Aarhus in early October,

- It’s important for us to raise people’s awareness of good Danish raw ingredients. When you cook, what you learn remains with you so you have it at your fingertips.

visitors will have another op­ portunity to have a hands-on experience with vegetables and meat as Danish Crown will be there for the first time with its interactive kitchen.

- It’s important for us to raise people’s awareness of good Danish raw ingredi­ ents. When you cook, what you learn remains with you so you have it at your finger­ tips, which is why you need to feel and touch the food.

This you can do in our kitch­ en, where our employees are on hand to talk about the raw ingredients, says Anne Ville­ moes, Danish Crown’s Direc­ tor of Corporate Communi­ cations.

Closer dialogue

- The kitchen has always been a place for lively dis­ cussion, and talking about food really becomes relevant once the meal is served. One of the main reasons for invit­ ing guests into our kitchen is to establish a closer dialogue with Danish consumers, says Anne Villemoes.

Bringing DC quality home | Culture |

47

Under the headline ‘It’s All About Food’, Danish Crown comes face to face throughout the year with consumers around the kitchen table. In August 2009, queues formed at the workshop in the interactive kitchen at EAT in Copenhagen, where ­curious consumers were able to try their hand at frying various cuts of meat. Later in the year, it was possible to meet Danish Crown for the first time with connoisseurs at the My Authentic Denmark (MAD = food) event at Ridehuset in Aarhus.

Pigs are not just pigs, and meat is not just meat. For the best culinary experience, the meat needs to be fried correctly, was the message which many consumers took home with them after a visit to Danish Crown’s frying workshop. The interactive kitchen fosters dialogue with consumers.

GOURMET CHEFS WILD ABOUT SPECIAL PIGS FROM DC 29 May 2009 - The structure and the juici­ ness were superb, and the rind was fantastically crisp.

My colleagues were over the moon because they were so surprised that you could get meat of that quality, says the kitchen chef Thomas Rodes from Restaurant Kong Hans, in praising the grilled prem­ ium Duroc ham which he tested on his colleagues at the exclusive restaurant.

Duroc with pork gravy

And so it didn’t stop with the sampling. In May 2009, Duroc pork chine with new ­onions from Lammefjorden on Zealand and pork gravy are on the menu at Restau­

Some of Denmark’s best restaurants are serving Duroc pork, and guests and chefs alike are thrilled with this new niche production.

rant Kong Hans, so guests can also enjoy the meat from this special breed.

- Our guests are delighted with the dish and have given­ it a warm welcome. It fea­ tures on our large innovation menu, and nobody has de­ cided against it so far, which is what happens occasionally with slightly unusual dishes, says Thomas Rode.

Other gourmet restaurants in Denmark have also become aware of the qualities of the Duroc pig. For example, Res­ taurant Noma, which has just been lauded as the world’s third best restaurant.

When the unofficial world cuisine contest, Bocuse D’Or, is held in 2010, Duroc will ­also be on the menu. |

The Duroc pig

Duroc is an exclusive breed of pig which provides meat of an outstandingly delicious eating quality. The pigs are slaughtered when they weigh 40-50 kg, and this makes the meat more delicate than traditional pigs.

Danish Crown has decided to establish a niche production of Duroc pigs together with two pig producers. The production is based at two breeding centres – Rønshauge and Munkbro. Duroc has been named the best pork in a tasting conducted by the Danish Meat Association, which is now part of the Danish Agriculture & Food Council.

48 | INTERNATIONAL |

Danish Crown all over the world 7% 5%

12% 11%

3% 4%

27% 29% 9% 9%

7% 6%

7% 7%

EXPORTS TO 130 COUNTRIES

Danish Crown is one of the largest meat exporters in the world.

With exports to 130 countries worldwide, Danish Crown is a major player in a highly competitive world market. In 2008/09, the Group posted revenue of just under DKK 45 billion.

Danish Crown’s consolidated revenue by markets 2008/09 2007/08

Key figures for the Group DKKm

Outlook for NINE markets

2004/05 2005/06 2006/07 2007/08 2008/09

Income statement Revenue Operating profit Net financials Profit for the year

48,598.4 48,534.0 44,345.8 46,972.0 44,765.3 1,734.8

1,859.7

1,871.8

1,815.9

1,638.0

-391.8

-490.3

-490.7

-672.0

-443.0

1,228.0

1,232.0

1,229.9

997.3

1,020.7 11%

Balance sheet Balance sheet total

23,224.9 21,706.0 21,279.6 23,016.8 20,915.0

Investments in property, plant and equipment

1,860.6

848.9

848.8

2,446.1

1,410.8

Subordinate loans

1,000.0

1,000.0

1,000.0

1,000.0

1,000.0

Equity

3,686.3

3,844.0

4,132.3

3,974.8

3,806.4

20.2%

22.3%

24.1%

21.6%

23.0%

-71.2

2,738.3

1,321.8

-246.1

2,823.9

Solvency ratio *) Cash flows Cash flows from operating and investing activities

*) Calculated on the basis of subordinate loans and equity

2004/05 2005/06 2006/07 2007/08 2008/09 Employees Average no. of full-time employees

28,553

26,938

24,334

26,652

12%

29%

27%

9%

9%

5%

7%

4%

3%

7%

7%

80.5%

79.5%

UK

Germany

Sweden

Russia

USA

Japan

EUROPE

The outlook for Danish meat and niche prod­ ucts from Denmark is good. The past year has seen growth in revenue in the domestic market.

The UK economy has been hard hit by the fi­ nancial crisis.

Tulip Ltd has weathered the storm through continu­ ous stream­ lining and now holds a strong posi­ tion as the economy re­ bounds.

Germany is a large and import­ ant market for Danish Crown, and with slightly increasing­ sales in 2008/09 our neighbour to the south of the border remains a solid market for Danish meat.

Sunny condi­ tions in Swe­ den for Dan­ ish Crown.

With almost a doubling in revenue, the Dan­ ish Crown Group has established a solid plat­ form for fu­ ture growth in the market across the Sound.

The Russian market has been quite unsettled in the past year, as reflected in declin­ ing sales, but following a turbulent period, the market is now mov­ ing forward again.

On the other side of the Atlantic, the trend is one of increasing revenue in the US mar­ ket.

Japanese con­ sumers love Danish pork.

The market­ is highly competitive, and high pressures and low pressures are expected to continue al­ ternating.

Danish Crown’s sales in Europe are characterised by stability, with only minor unset­ tled periods.

Europe ac­ counts for four fifths of consolidated revenue.

19.5%

20.5%

REST OF THE WORLD USA, Japan, Australia and Dan­ ish Crown’s many other export mar­ kets account for one fifth of revenue altogether.

24,274

by Mikael Wulff and Anders Morgenthaler

Supplementary payments, pigs

0.70

0.65

0.75

0.60

0.70

Supplementary payments, sows

0.60

0.65

0.55

0.65

0.65

Supplementary payments, cattle

0.80

0.90

0.85

0.70

0.75

1,272.3

Supplies from members weighed in (million kg) 1,551.4

1,504.8

1,468.9

1,426.7

Sows

76.3

72.2

67.7

68.1

62.8

Cattle

72.5

67.8

69.7

64.3

66.7

16,718

15,044

13,465

12,152

10,685

No. of members No. of members

7%

Denmark

Supplementary payments, DKK per kg

Pigs

6%

Very impressive, but she can forget about charming her way out of this ...