Diversity is key to PHW Group’s continuing growth

Recent and future growth for German-based poultry firm, PHW Group, is achieved through diversification of the business, according to its CEO.

Yurii Bukhanovsky | Bigstock.com
Yurii Bukhanovsky | Bigstock.com

Recent and future growth for German-based poultry firm, PHW Group, is achieved through diversification of the business, according to its CEO.

The owner of the Wiesenhof brand, among others, PHW Group has announced a 4.1 percent increase in sales to EURbillion (US$2.94 billion at current exchange rates) in its financial results to June 30, 2018, published recently.

The firm attributes this growth to the increasing popularity of poultry meat, rising sales by its subsidiaries in Poland, Hungary and The Netherlands, as well as the resumption of production at its poultry specialties facility in Lohne, which was destroyed by a fire in 2016.

Total sales of the Group’s poultry meat reached EUR1.4 billion, an increase of 1.7 percent from the previous year. Sales of poultry specialties for chicken, turkey, duck, convenience food and sausages increased by a total of 8.0 percent to more than 782,850 metric tons. While chicken product sales were up, those of turkey and duck registered a slight decline.

The contribution by its businesses in the rest of Europe was up by 9.6 percent from 2016-17 to EUR523.5 million.

Compared to the previous fiscal year, the Group’s Animal Nutrition and Health business recorded a slight decline in sales, but its Mega feed brand increased marginally.

Diversification strategy

Over the past financial year, the firm has re-positioned itself as a supplier of more diverse high-quality proteins than the family-owned company’s original poultry meat business.

“We see our investment in this area as a way to grow through diversity,” said Peter Wesjohann, CEO of the PHW Group. “We want to drive our core business by advancing our conventional business and driving our animal welfare concepts, while expanding the alternative sources of protein. In concrete terms, this means that we do not see the growth of the plant-based food sector as a threat to our existing core business, but as an opportunity.”

Over the past year, PHW Group has developed strategic partnerships with Israeli start-up SuperMeat, the U.S. companies Beyond Meat and Good Catch Foods, and Enterra Feed Corporation of Canada.

Earlier this month, PHW Group announced it had signed an agreement with JUST Inc. to use its sales and distribution network to accelerate the adoption of JUST’s plant-based egg substitute products to European consumers.

More investment, animal welfare-friendly programs

In 2017-18, PHW Group invested a total of more than EUR232 million, focused mainly on its German operations, and including a new production facility for the Gepro poultry protein business in Bogen in Bavaria in southern Germany. EUR32 million was invested in expansion and modernization of plants belonging to Drobimex in Poland, Ameta in Bulgaria, and Esbro in The Netherlands.

Main focus areas for the firm’s EUR2.8-million Research and Development program are product development, quality assurance measures and the further development of existing animal welfare programs.

High-welfare products accounted for around 60 percent of poultry meat product sales in 2017-18. PHW Group’s partners already produce poultry under six different husbandry concepts as well as conventional methods, amounting to around 3.3 million birds per week by the end of the reporting period. The previous year’s weekly output of high-welfare birds averaged 1.7 million.

“Our next goal is to increase the production volumes of all high animal welfare products to 80 percent in 2019,” said Wesjohann.

PHW Group has confirmed it will continue to develop its programs on sustainability management throughout the corporation. By the end of this year, it has undertaken to achieve ZNU standards at all its chicken and turkey production sites. Since 2010, the Wiesenhof brand has been a partner of the Center for Sustainable Business Management (ZNU) at the University of Witten-Herdecke, and is the only meat company to be certified according to the ZNU standard for Sustainable Food Management.

German-based PHW Group is Europe’s fourth largest poultry meat company, according to the latest Poultry International Top Poultry Companies rankings, slaughtering 350 million broilers in 2017.

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