Huge Danish pigmeat merger

By Matt Dempsey

Two huge Danish pig coops are to merge creating a unit that will slaughter 20 million pigs a year or almost 400,000 animals a week.

The merger of Danish Crown and Steff Houlberg will create one of the largest pig processing companies in the world with over 22,000 employees and almost 24,000 farmer members.

Danish Crown is by far the largest pig processor in Denmark, killing over 16 million pigs a year in 35 slaughtering and cutting plants. It had a turnover in the year ending April 2000 of 36.9 billion Danish Kroner or four billion Irish pounds. Its new partner Steff Houlberg had a turnover of just over half a billion pounds.

The initiative to go into the merger negotiations was taken by the Steff Houlberg Coop, who said that as they were unable to match the profit levels of Danish Crown and so decided to open up merger negotiations.

The reasons given by the Danish coops to join merger discussions were the same as given in the giant Arla MD Foods on the dairy side. The enormous concentration in the retail trade.

Bent Marbo the chairman of Steff Houlberg, who is giving up his job, said that "Today you either have to be small and cater for niche markets or you have to have a size that permits you to attain a significant international position and so benefit from economies of scale. We are in the middle and unable to exploit the benefits of being either small or big.

The new coop will trade under the name Danish Crown and it's expected that there will be significant savings in administration and marketing costs. Steff Houlberg's main head office will be closed.

The new Danish firm will slaughter approximately six times the output of the entire Irish pig meat industry.

The merger comes at a time when the Irish pig meat industry has been given the go ahead to supply pig meat to the US. Galtee is by far the strongest brand.

However, Ireland is not yet back in Japan. A delegation of the Department and Bord Bia is visit the country over the next few days in an effort to get the Japanese market re-opened. Denmark has never lost its place in either the US or the Far East markets.

Intense interest in Tralee Beef and Lamb

The feelers put out by the receiver of Tralee Beef and Lamb has resulted in a large number of serious enquiries with three from abroad.

Several parties have looked at the plant. It's understood that the receivers appointed to the company, Grant Thornton have put a guideline price of £1.5m on the plant. They hope to conclude a relatively quick sale - ideally by December 1.

All potential buyers are aware that there is over £2m outstanding to farmer suppliers and that some accommodation will have to be arrived at with the farming organisations before a deal is completed and the plant re-opens.

While the potential bidders have been generally satisfied with the condition of the plant some have said that the boning and chilling capacity may need to be increased to be able to cope with the plants full slaughtering capacity.

Progress at Green Belt

The specialist forestry company Green Belt had a good 2000. Its year end is August 31 and it showed a strong profit performance.

While the company, because of its small size, is exempt from filing a detailed profit and loss statement the balance sheet for August 2000 versus August 1999 implies a net profit of just over £200,000, with shareholder funds now standing at £270,400, compared with just £65,800 the previous year.