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Danish Crown has kinked cost curve

by 5m Editor
16 December 2004, at 12:00am

THE NETHERLANDS - Cost reductions of approx. DKK ¼ billion at pig and cattle slaughterhouses.

The ongoing optimisation and rationalisation at Danish Crown’s pig and cattle slaughterhouses resulted in production cost savings approaching DKK 250 million for 2003/04 in relation to general wage and price developments.

“Normally, the task is to offset cost increases by rationalisation and restructuring,“ said CEO Kjeld Johannesen. “But in the current, international competitive situation, this is no longer sufficient. Consequently, it is particularly satisfactory that, during the past financial year, we succeeded in kinking the cost curve by reducing our production costs by up to DKK ¼ billion.“

“A great effort was required by the entire organisation to achieve these savings,“ added Kjeld Johannesen. “But in the light of the tough competitive situation, the savings are also necessary to maintain our competitiveness.“

The savings partly stem from rationalisation and automation of slaughtering operations and transfer of production to lower cost countries. During the year, weekly production at Danish Crown’s German plants increased significantly. In addition, savings were achieved through piece rates for new production methods. Millions of kroner were also saved through improved raw material utilisation.

Source: Dutch Meat Board - 12th December 2004

5m Editor