Danish Crown to shut down China facility as profitability challenges persist
CHINA – Danish Crown is in the process of shutting down its facility in Pinghu, near Shanghai, following a strategic review that found the operation unsustainable.
The closure puts 112 jobs at risk as the Danish meat processor informs employees and customers about the decision to either sell or close the site.
The factory, which began operations in 2019 as part of the company’s expansion into China, has struggled to turn a profit despite efforts to improve performance.
A strategic review, led by Danish Crown’s new executive team, determined that continuing operations in Pinghu was no longer feasible.
Danish Crown’s Group CFO, Anders Aakær Jensen, stated that the company prefers to sell the business and has already signed a letter of intent with a preferred buyer, with agreed terms for a potential sale.
Although discussions are progressing, Jensen noted that finalizing the transaction could take several months.
If a sale does not go through, Danish Crown will close the facility and repurpose its equipment for use in other parts of its global supply chain.
The company expects to reach a final decision regarding the future of its Pinghu operations by early summer and will provide further updates at that time.
Leadership changes at Danish Crown
Towards the end of last year, Danish Crown announced the appointment of Niels Duedahl as its new CEO, bringing in an external leader to oversee the company’s transition.
Duedahl took over on September 2, replacing Jais Valeur, who stepped down earlier than initially planned after serving as CEO since 2015.
Valeur’s last day at the Randers-based company was August 30, marking the end of his tenure as the head of the meat cooperative.
Danish Crown’s chairman, Asger Krogsgaard, stated that the company is entering a new strategic phase that requires precise execution and significant transformation.
He highlighted Duedahl’s leadership experience, describing him as a decision-maker with a clear vision who understands the importance of company culture during periods of change.
Before joining Danish Crown, Duedahl was the CEO of the Danish electricity and telecommunications firm Norlys, a role he held since 2009.
His executive career also includes positions at The Lego Group, telecom provider TDC Group, and financial institutions Nordea and Jyske Bank.
Duedahl expressed enthusiasm about leading Danish Crown through its transformation, stating that the opportunity was too significant to pass up.
Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
