Presented by Group 2 Chris Yip Daisy Kwok Josephine Ngai Simon Li Tommy Lee

Transcription

1 Presented by Group 2 Chris Yip Daisy Kwok Josephine Ngai Simon Li Tommy Lee

2 Danish Crown Group: a Meat Processing Giant The Danish Crown Group is an international food producer specializing in the production of meat (pork and beef). It is one of the two or three largest meat exporters in the world. Also, its pig slaughtering business is the third largest worldwide and the second largest in Europe. Danish Crown is the result of a number of mergers of slaughtering businesses. The original cooperative was founded 125 years ago and is still the owner of the group. In October 2010, the group was transformed into a limited shareholding company in order to prepare for future expansion of the equity base, with an elected management consisting of cooperative members and employee representatives. World s Largest Exporter of Pork The Danish Crown Group s products are sold to more than 100 countries and 90% of the meat products go to exports. Danish Crown Group exports total DKK 22 billion a year, which corresponds to 4.2% of all Danish goods exports and 39% of all Danish agricultural exports. UK is the largest single market for pork in terms of revenue, followed closely by Japan and Germany. Danish Crown supplies pork to customers all over the world Subsidiaries with Different Specialties The Danish Crown group employed about 23,500 staff, of which, 10,500 are employed by the parent company, the rest by the subsidiaries. It is one of the largest employers in Denmark. The Danish Crown Group has a turnover of approximately Euro7billion. A significant share of the turnover takes place in the subsidiaries, such as Tulip Food Company (produces canned products that are popular all over the world), ESS-Food (sells and distributes meat products worldwide) and Scan-Hide (processes and sells hides to international tanning companies). 2

3 Wide Range of Products & Businesses The Danish Crown Group is involved in the following products and businesses: Fresh meat, which involves slaughtering pigs and cattle and wholesaling fresh meat products to meat traders and national and international retail chains. The fresh meat companies were responsible for 56% of the turnover in (50% from the pork division and 6% from the beef division). Processing, which involves production and sale of processed meat products for the retail and food service sectors worldwide. The processing companies are responsible for 36% of the turnover in Trading & other service, which involves sales and distribution of meat and meat products (including products from the Danish Crown Group) to most of the world, through an international network of sales subsidiaries. The trading companies were responsible for around 8% of the turnover in Competitive Despite Economic Crisis In 2010/11, the Danish Crown Group has a 14% increase in the consolidated revenue to DKK 51.8 billion 1, despite the weak growth in demand especially in Europe. The net profit is also increased to DKK 1.76 billion, up 7% on the previous year. This is the highest net profit realized in the history of the group, despite that no net growth has been realized for some time. Processing 18,635 36% Other 3,991 8% Pork 26,009 50% Such strong results are mainly due to a targeted strategy of cutting costs, increasing introduction of higher-value products and further developing the group s international business portfolio. Beef 3,119 6% Revenue for 2010/11 by business area (DKK Million) 1 Annual Report 2010/11 ( 3

4 Strong Emphasis on Corporate Social Responsibility Danish Crown s Corporate Social Responsibility (CSR) policy was introduced as a management tool in all group subsidiary, with a focus on animal welfare, working conditions, employee development, environmental protection and resource ultilization. As a leading food producer, the Danish Crown Group is aware of its responsibilities with regard to assisting in reducing the harmful effects of its activities on the climate. It established both climate change and environmental. Over the past years, considerable improvements have been accomplished. For example, CO2 emissions per pig slaughtered has been reduced by 29% since Danish Crown's Horsens slaughterhouse Slaughtering is one of the most important processes for the Danish Crown Group. To slaughter around 60,000 pigs everyday, the Danish Crown Group carries over 1200 slaughterhouses, in which Danish Crown Horsens slaughterhouse is the largest and most modern meat processing plants. With the use of gas stunning system and fully automated slaughter line, this slaughterhouse clearly demonstrates the group s effort for better food quality and determination for environmental protection. Corporate Governance of a Cooperative The Danish Crown group is a cooperative with a democratically elected management. the cooperative is owned by the suppliers and managed with reference to its Articles of Association, the Danish Companies Act and other relevant Danish and international rules and regulations. The management structure is based on a dual board system and the separation of the Board of executives and the executive Board. the management the Board of Directors and the executive Board attaches importance to exercising good corporate governance, to focusing on the interest of suppliers and to long-term value creation, as well as the timely exchange of relevant information between the company s governing bodies. 4

5 China Strategy - A Landmark The entrance into the Chinese market is a significant milestone of Danish Crown to back to the good old days 2. In the past, Danish Crown sold mainly by-products such as ears, toes and intestines to China. Nowadays, the growing Chinese middle class, around million people, want more qaulity pork instead of just by-products. China's imports of pork and pork offal reached their peak in 2008 with a volume of 910,000 tons. In 2010, the country imported 900,000 tons of pork, with Denmark being the major supplier, followed by the United States, Canada and France 3. A new agreement signed in August 2010 between Denmark and China to open up the export market of processed foods such as sausages and tinned products from Danish Crown. It is expected, in 2012 China will be Danish Crown s second-largest market after UK 4. Danish Crown s Success factors High Food Quality Food safety and quality are decisive sales parameters worldwide. In several markets this is a fundamental precondition for access. Danish Crown is thus one of only a very small number of companies worldwide with direct exports to China. Global Workplace Danish Crown has its roots in Denmark, but given that over 90 per cent of production is sold abroad. It is the international, rather than the domestic marketplace, which is most significant. The company s determination and ability to forge a link between the local ownership and the global market are what have made it a significant stakeholder in the world marketplace today. Willingness to Change Danish Crown operates in a sector in which orders are received in the evening and products are shipped in the morning. Rapid adaptability is essential in order to remain competitive. - End - 2 In the 1930s, Denmark exported large quantities of butter and bacon to the UK where the bacon market was insatiable. Danish Crown is now experiencing a similar situation in China Danish Crown likes pork potential in China, MeatPoultry.com, Nov. 9,