The supervisory board of Danish Crown proposed Monday morning closure of two factories and adjustment of capacity at another factory. The factories to be closed at the end of August are Vojens and the deboning department in Nykøbing together with a 40 percent reduction of capacity at the slaughterhouse in Holstebro.

- A combination of bad financial circumstances in pig production all over Europe and missing environmental approvals from the Danish local authorities mean that we have been forced to make a quick decision to maintain the market strength of our company. It has been a very difficult decision to make that will affect so many employees, says Kjeld Johannesen, CEO of Danish Crown.

The decision about closing the slaughterhouses comes after the latest pig count of April. It shows that structural developments in the agriculture are faster than expected, and that the missing environmental approvals mean that closed pig productions are not as easily taken over by new farmers as they used to, due to waiting time of up to three years for environmental approvals.

- During the last weeks Danish Crown has operated with a capacity of only 80 percent utilization and this is not sustainable. The pig count from end of April proved that we had to react if we want to act as a financially responsible company. We had foreseen a decline in the slaughterings but new figures show a much faster and more drastic decline than expected. The last weeks’ situation demands a fast reaction. It is no secret that the decision is even harder so soon after the decision to close the departments at Skive and Hurup, says Kjeld Johannesen.

Prognoses call attention to the fact that pig production will rise again by the end of 2009 and Danish Crown has ensured the possibility of increasing capacity again, if necessary.

- At the moment Danish Crown is a company with a strong market position which is important to keep in order to safeguard jobs in Denmark. A small part of the capacity adjustment is seasonally based but far the largest part of the drastic adjustment is a result of a significant decline of pigs for slaughter to the slaughterhouses, says Kjeld Johannesen.

According to development of the Danish pig production right now, there will be a current demand for adjusting resources to the number of pigs for slaughter.