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VION Announces Plan for Pig Plant Closure

06 March 2014

GERMANY - VION has announced it intends to close down its Lingen plant following a 30 per cent fall in animals slaughtered and losses of millions of Euros.

On 5 March, the executive board of VION Zeven AG informed employees, customers and suppliers that the slaughter and processing plant in Lingen would be closed down as soon as possible, probably by 30 April 2014.

The German plant has been incurring ever higher losses in the past few years, after failing to retain its main food retail customer in 2008. As a result, the number of animals slaughtered dropped by 30 per cent to only 12,000 pigs a week in 2013. Financial losses were more than €1 million every year.

Intensified efforts to generate additional export orders proved inadequate to enable the company to achieve sufficient turnover. The company also suffered from a reduced supply of raw materials: the number of pigs supplied by Dutch companies close to the German border has dropped by more than 6,000 per week in the last few years.

The closure of the Lingen plant is on the agenda of a meeting of the supervisory board of VION Zeven AG this week. VION Food stresses that it plans to maintain a presence in the excellent producers' area of Lower Saxony through its Emstek plant. A plant of this size, which has a permit to slaughter 70,000 pigs a week, is important for internationally active meat suppliers to be able to compete, specifically in Lower Saxony.

VION Zeven AG has informed the shareholders of the association operating the public slaughterhouse, Fleischzentrum Emsland (Emsland Meat Centre), and the officials of the municipality of Lingen and the Emsland district that it intends to close its Lingen plant. The Lingen plant ceased slaughtering pigs for external parties in 2002.

The Executive Board of VION Zeven AG has been conducting confidential talks with officials of the municipality of Lingen and the Emsland district. The economic reasons for closing the plant have been explained to these officials in sufficient detail and the closure came as no surprise.

In the context of these talks, an independent firm of accountants was asked to draw up a report on the economic outlook for the Lingen slaughter plant late last year. In their report, the auditors came to the conclusion that closing the Lingen plant was the only realistic option. According to the auditors' report, making any further investments and modernising the plant would not serve to strengthen its position, since Lingen lacks both customers and locally sourced raw materials.

The management of VION Zeven AG informed employees of the Lingen plant today and announced that it wanted to immediately engage in talks with the Works Council to negotiate compensation and redundancy schemes. The intended measure will affect 104 employees on the payroll in Lingen. All employment contracts will have to be terminated. However, the employees will be allowed to apply for vacancies at other VION Food group companies.

ThePigSite News Desk

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