USA – Danish Crown, the Randers-based meat cooperative, is actively considering external investment strategies to drive growth in key subsidiaries and fund the establishment of new processing plants.
Chairman Erik Bredholt has pinpointed three pivotal units—DAT-Schaub in Copenhagen, Sokolow in Poland, and KLS in Sweden—as potential candidates for external investment.
The primary objective is to infuse financial strength into these subsidiaries, accelerating their growth trajectory while simultaneously freeing up capital for the broader development of the conglomerate.
Initial focus is likely to be on DAT-Schaub and Sokolow, both operating in markets ripe for expansion through strategic acquisitions.
In an interview with Denmark’s Finans publication, Bredholt stated, “By bringing in external co-owners with intelligent capital into our subsidiary companies, we will have better opportunities to unlock the entire conglomerate’s growth potential.”
Meanwhile, Danish Crown which is currently grappling with competitive challenges since spring 2022, has already set in motion a substantial cost-saving and efficiency plan.
The move to attract external co-owners aims to bolster competitiveness amid global market dynamics, including dwindling pork exports to China and increased competition from low-cost pork imports from the US and Brazil.
One of the subsidiaries earmarked for external investment, DAT-Schaub, is a key player supplying meat casings to the food industry and producing crude heparin from pork casings for pharmaceutical applications.
Sokolow, based in Poland, operates slaughterhouses and processing plants, while KLS in Sweden is integral to meat processing.
Bredholt clarified that the co-op is open to attracting minority investors to these subsidiaries, strategically addressing market challenges and reducing dependence on the global market.
The goal is to navigate the complex market landscape effectively, ensuring sustained growth and mitigating risks.
The chairman emphasized that while external investment in subsidiaries is a viable strategy, allowing external investors into the co-op itself is deemed unrealistic.
Bredholt highlighted potential conflicting interests within a shareholder group as a key consideration in maintaining the co-op’s stability and strategic direction.
This strategic exploration of external investment reflects Danish Crown’s commitment to adapting and thriving in a dynamic market environment, securing its position as a leading player in the meat industry.