Vion faces challenges after implementing strategic plan

By Michelle Perrett

- Last updated on GMT

Vion hit by price fluctuations
International meat producer Vion has said it is facing a number of challenges in 2019 after being hit by low cattle hide prices and high pig prices during 2018.

The company said its financial results for 2018 saw strong operational cash flow, which reduced the net debt position and further improved the solvency rate of the company.

Net profit decreased from €11.6m in 2017 to €10.2m in 2018, following higher depreciation charges from investments in recent years and lower tax benefits, it said.  Net debt of €35.1m at the end of 2018, represented a decrease of €14.9m. However, it said that its balance sheet remained strong.

Vion said it was facing a number of developments in 2019, including the African swine fever detected in Eastern Europe, southern Belgium and China.

It added that the ‘war on trade’ between the US and China could impact markets, while the outcome of Brexit was still uncertain.

Vion said it had started a strategic initiative to build balanced chains (BBC), together with farmers, customers and chain partners, in order to create sustainable growth for the future.

Ronald Lotgerink, CEO of Vion, explained: “The initiatives included in our strategic plan to modernise our production footprint will provide Vion with a strong competitive base for our future growth. On 28 February 2019, we announced the last initiative, an investment of €35m in our production facility in Boxtel, which will enable a shorter supply chain and a sustainable way of working at a single location​.”

He said that while these initiatives contributed to its operational profit, they could not fully compensate for the effects of low cattle hide prices and high pig prices during a very dry summer.

Lotgerink added that, following a successful launch in the Netherlands, Vion’s Pork division launched Good Farming Balance, a demand-driven supply chain, in the German market.

Other initiatives started in the previous year paid off in 2018, such as the closure of our Zeven facility and productivity investments in Emstek in Germany and in the expansion of our facility in Apeldoorn​,” he said.

The company also invested in production plants at its beef division in Leeuwarden and Waldkraiburg. 

Related topics: Financial, Netherlands, Pork

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