Danish Crown and the German farmers’ group, Westfleisch, are to “join forces” in a sow deboning and sales venture which the two companies say will boost returns for their producers.
Described as a 50:50 investment, the move brings Danish Crown’s 8300 farmer members and Westfleisch’s 4200 farmer members together in a development which will access synergy opportunities between the two businesses.
Westfleisch specialises in deboning sows at its plant in Schöppingen, near the Dutch border, handling 355,000 animals a year. Danish Crown, meanwhile, slaughter around 325,000 sows in Denmark annually, selling them as half-carcasses, primarily to buyers in Germany.
Under the new joint venture agreement, to be known as Westcrown, the Danish company will “co-invest” in its own deboning facilities.
“We have a clear expectation that co-investing will secure better prices for our owners,” said Danish Crown’s group CEO, Kjeld Johannesen. “More specifically, it will remove an intermediary step to increase earnings for our owners.”
Westfleisch board spokesman, Dr. Helfried Giesen, added that the new arrangement was a “win/win partnership”.
“We are very pleased to have found such an applicable partner for a common business in a competitive market segment,” he said. “Danish suppliers are known for high quality sow meat, which adds eminently to our current raw materials in Northwest Germany and our know-how in refining.”
The joint venture, at this stage, remains subject to approval by the competition authority in Brussels.