Danish Crown to Open Plant in China
Danish Crown plans to invest in the region of DKr300 million (€40 million) to establish a processing and retail product plant at Shanghai in China. The plant’s production will be based on Danish raw materials.
Danish Crown is already a major exporter of fresh pork and the so-called ‘China goods’ (trotters, ears, tails etc) which the Chinese love, appreciate and pay well for. Indeed, Danish Crown is Denmark’s second largest exporter of goods to China by value, only surpassed by Kopenhagen Fur.
Although the sale of meat to Chinese consumers continues to a large extent to be from so-called wet markets, where the pig is sold cut into relatively large pieces, which the consumer can see and touch, the market is changing rapidly.
Jais Valeur.
“Actually three things are happening,” points out says Jais Valeur, chief executive of Danish Crown. “Firstly, much of the consumption is moving into food service or restaurants similar to the USA or Europe. Secondly, we see a vast increase of e-Commerce where groceries are bought and delivered at home. This is growing immensely in China and cities such as Shanghai likely have the world’s most advanced e-Commerce market. The third trend is that consumers in supermarkets have also started buying retail packed products precisely as we know from Denmark.”
Chinese consumers now share many common characteristics with those in Europe. The Chinese also have less time to be at home cooking food from scratch than they had a few years back. Their demand for convenience, quality and animal welfare is therefore increasing. Denmark and Danish raw material is popular in this regard.
“It is therefore evident that we should try to capitalise on this by our own production. Is this a chance we are taking? Yes, it is, but this is one of the chances we should take as a big company and try to see if we can get closer to the market, closer to consumers and further up in the value chain in China – rather than just being a raw material supplier,” says Jais Valeur.
Establishing a processing plant in China is part of Danish Crown’s new development strategy towards 2012 which is called ‘4WD’.
