Food and Beverage Business

Danish Crown meat co-op offering opportunities for external investment in specific subsidiaries

Danish Crown meat co-op offering opportunities for external investment in specific subsidiaries Danish Crown Food and Beverage Business

Danish Crown is open to external investment in certain business units as part of its growth strategy. This initiative aims to secure the financial backing necessary for expanding its subsidiaries and constructing new processing plants. Chairman Erik Bredholt has identified three business units – DAT-Schaub, Sokolow, and KLS – as potential candidates for external investment.

According to Bredholt, bringing in new co-owners is expected to provide financial strength to drive the growth of these businesses. It also represents an opportunity to release capital for the development of the entire conglomerate. The move aligns with Danish Crown’s plan to boost competitiveness in response to the challenges faced in recent months.

Bredholt emphasized the need for significant action given the substantial cost-saving and efficiency plan already in place. The aim is to attract co-owners with bright financial resources to unlock growth potential across the conglomerate. He noted that opening the co-op itself to external investors was unrealistic due to conflicting interests that may arise within the shareholder group.

While the company is exploring the option of introducing minority investors to its subsidiary companies, it aims to focus on certain markets with opportunities for acquisitions to drive growth. DAT-Schaub, for instance, supplies meat casings to the food industry and has an annual turnover of DKr5.3bn. Sokolow and KLS, operating in Poland and Sweden respectively, each generate an annual turnover of DKr8.2bn and DKr5.5bn.

Bredholt stressed the need for Danish Crown to increase its processing capacity in order to lessen its reliance on the global market and move closer to end consumers. He reiterated that maintaining a focus on processing raw materials into finished food products would result in higher and more stable profit margins.

In contrast, Bredholt pointed out that allowing external investors into the co-op itself would not be feasible due to potential conflicts of interest among shareholders. However, the company remains open to potentially bringing in new co-owners to its subsidiary companies.

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