HKScan Group, a leading Nordic meat and poultry company, aims to improve operational efficiency by restructuring its production capacity in Denmark, where the group has production facilities in Vinderup and Skovsgaard. The planned actions will create an efficient production platform supporting HKScan’s strategic goal of boosting profitable growth.
The restructuring will centralize poultry slaughtering and cutting at the modern Vinderup facility. The investments and rebuild completed at Vinderup over the past two years have increased HKScan’s slaughtering and deboning capacity, resulting in excess capacity. Packaging and warehousing will remain based in Skovsgaard. Scheduled for completion by the end of March 2015, the restructuring will result in a net headcount reduction of approximately 85-95 employees in total, involving reorganization both in Skovsgaard and Vinderup. The plan is a subject to statutory negotiations, which begin on January 6.
The targeted annualized cost reduction and profit improvement is in excess of EUR5 million (US$5.96 million), including efficiency measures related to the production restructuring. The impact is targeted to materialize from the second quarter 2015 onwards. The restructuring causes a non-recurring cost of EUR1.6 million (US$1.9 million), which will be reported in the fourth quarter of 2014.
"We need to adjust our production capacity in line with market demand. At the same time, cost reductions are required. We want to get our Danish operation back in balance after the rebuild following the fire of June 2012 and start investing in growth opportunities. We are confident that by realizing the plan, we can improve capacity utilization and create a competitive cost base and new opportunities for profitable growth. HKScan is committed to developing and investing in Danish business and production,” said Anders Jeppesen Jensen, general manager of HKScan Denmark A/S.
HKScan is the largest poultry company in Denmark with net sales totaling EUR225 million (US$268 million) in 2013 and approximately 750 employees. The company sells, markets and produces poultry-based products mainly under the well-known Rose brand, which is also exported widely.