China: Danish Crown to shut processing plant in Pinghu

Denmark-based meat processor Danish Crown has announced the closure of its operations in Pinghu, near Shanghai in China.

Danish Crown opened the factory in 2019 as part of the company’s expansion into China. However, after a strategic review, it has determined the facility has not met profitability expectations.

Commenting on the move, Danish Crown Group CFO Anders Aakær Jensen said: “It is clear to us that the operations in Pinghu is not the right strategic fit for Danish Crown. Our preference is to divest the business, and we can confirm that we have signed a letter of intent with a preferred buyer and agreed terms for a divestment. While these talks are promising, we expect they will still take a few months to conclude”.

“Our strategic review has delivered two clear options for us; to either divest or to close the site and repurpose the quality equipment elsewhere in our global supply chain”, he added. “To carry on our current set-up in Pinghu is no longer a viable option, and therefore we have decided that the time is right to bring those operations to an end while we work diligently to reach a final decision about the future of the factory itself”.

Danish Crown added that it planned to finalise its decision on the remaining facilities in Pinghu by early summer.

Source: Danish Crown