Reasons for Closure
The Pinghu factory opened in 2019 as part of Danish Crown’s strategy to expand its business in China. However, the facility failed to achieve the expected profitability, and efforts to improve operations were unsuccessful.
Danish Crown Group CFO Anders Aakær Jensen confirmed that the company is in negotiations to sell the plant and has already signed a letter of intent with a potential buyer. However, the final decision on the plant's future is expected in the coming months.
Optimistic Start and Challenges
At its launch, the factory had a processing capacity of 14,000 tonnes of pork per year, supplying Chinese consumers with Danish pork products. A key advantage was its partnership with Alibaba, China’s e-commerce giant, providing access to 466 million users.
Despite these ambitious plans, operational difficulties led to the decision to exit the Chinese market.
Crisis in Danish Crown
The closure of the Pinghu facility is part of a broader restructuring of the company, which has been struggling due to a significant decline in the number of slaughtered pigs in Denmark.
Danish Slaughter Statistics:
- 2021 – 18.5 million pigs
- 2022 – 17.5 million pigs
- 2023 – 14.6 million pigs
Figures for 2024 are yet to be released, but the downward trend continues.
Danish Crown is actively working on optimizing its business operations and exploring new market opportunities.
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