Danish Crown merger creates cut-backs

- Last updated on GMT

Related tags: Danish crown, Employment, Corporate governance, Director

Danish Crown, the European meat processor, is proposing to cut
staff by 115 as part of the integration of Danish Crown and
Steff-Houlberg.

Danish Crown, the European meat processor, is proposing to cut staff by 115 as part of the integration of Danish Crown and Steff-Houlberg.

The reduction, which comes on the back of a strong set of 1Q results, recently reported by foodproduction.daily, will primarily affect the former Steff Houlberg head office at Ringsted which employed 270 to 280 people.

A part of the reduction has already been implemented, as 58 employees have either resigned or given notice that they wish to resign. Another 43 employees, some of them employed on temporary contracts, will be made redundant.

The company estimates that the job cuts will bring annual savings of almost DKK 50 million (€6.7m), which, in an industry which is currently experiencing a dip in the value of its sales, will be especially helpful should there be a further softening of the market.

The employees were notified of the plans last week, and negotiations on the implementation of the reductions have been started with the employees.

Gert Kjeldsen, the Steff Houlberg CEO, has quit following the merger. Mr Kjeldsen will resign immediately after the practical integration of the two organisations has been implemented.

Other Steff-Houlberg executives have been given places on the Executive Board.

Jan Isager, finance director, will take up the post of finance director of daka. Frode Lauersen, production director, will continue in his post with the responsibility for the departments at Ringsted, Rønne, Slagelse, Ebeltoft and Sdr. Felding, reporting to Gert Strømsted, production director of the Pork Division. Bjarne Møller Larsen, sales director, will be transferred to the group where he will perform various ad hoc assignments until his contract expires.

The merger decision saw some 3,000 Steff-Houlberg employees move to Danish Crown as their new employer. Between 500-600 employees have changed employer once again as all the processing activities of Steff-Houlberg have been transferred to Tulip Food Company.

This staff includes some 400 employees at Ringsted, about 100 at Ebeltoft, and 30-40 employees at the sausage plant Borring Pølsefabrik near Silkeborg.

The remaining employees will be associated with the Pork Division.

All employees of Danish Crown and Tulip have been notified of these structural changes. "The highest priority from now on will be the everyday optimisation at the individual plants, and at the same time we will institute analyses regarding how we can best make the production as efficient as possible such that it is the best practice that is introduced at all facilities,"​ said Kjeld Johannesen, the CEO of Danish Crown.

"In terms of manpower we do not expect any changes worth mentioning on the production side. However, in connection with subsequent rationalisation measures and perhaps transfers of production activities between departments, a relocation of jobs may become necessary."

Related topics: Processing & Packaging

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