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Danish Crown beef takeover speeds growth plan

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Oscar Rousseau

By Oscar Rousseau+

Last updated on 12-Jan-2017 at 12:57 GMT2017-01-12T12:57:27Z

Danish Crown Beef CEO Finn Klostermann said the German takeover made 'strategic sense'
Danish Crown Beef CEO Finn Klostermann said the German takeover made 'strategic sense'

Danish Crown’s planned takeover of German slaughterhouse Teterower Fleisch will reinforce the company’s global strategy of increasing revenue generated by beef from 10% to 15%.

Yesterday (11 January) Danish Crown announced plans to acquire German organic beef slaughterhouse Teterower Fleisch in a deal believed to be worth hundreds of millions of euros.

The move will instantly make Danish Crown the fifth-largest beef processor in Germany and the CEO of the company’s beef division, Finn Klostermann, told this site the move was part of wider strategy to boost revenue.

Over the last 10 years, the beef business has been growing, but there is strong desire to step forward in the beef value chain and develop products that are ready for the consumer,” said Danish Crown Beef CEO Klostermann.

Investment planned

Currently, Danish Crown Beef accounts for around 10% of total revenue, but Klostermann wants to increase this to 15%.

If Danish Crown’s acquisition of German-based organic beef slaughterhouse Teterower Fleisch is approved, the meat processor will look to make investments to upgrade the plant and bolster its ability to lift revenues.

To achieve this, Danish Crown Beef needs raw material and Teterower Fleisch’s access to vast raw materials renders the pending acquisition strategically important to Danish Crown.

Deboning a priority

Very shortly, after we get the go-head from the authorities, we have to bring Teterower’s slaughterhouse forward in the value chain in the way we normally do with Danish Crown Beef,” added Klostermann.

The first job is to start building a deboning facility, so we can debone the carcases on site – the space is there, so all we need to do is buy the processing equipment and install it and train the people.

This will not be a big investment as the square metres for building work are already in place, so all Danish Crown will need to invest in is the equipment and manpower training.

Teterower Fleisch is a family-owned company and the owners are in their 60s to 70s, according to Klostermann. The business has 187 staff and there are no plans to hire or fire any staff immediately.

The German business slaughters around 110,000 cattle annual and has a turnover of $150m. Around 20% of the cattle it slaughters are organic . The business also slaughters pigs and lambs at much smaller volumes than cattle.

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