It has been a long dark winter’s night in the history of Danish pig production, but at the end of the financial year the beginning of a new dawn can be discerned on the horizon. The ambitious strategy we presented and which in the spring became known as DC Future is evident in the results for the year.

The strategic work was already well underway by early spring 2009. The task was simple to put into words, but the challenge was massive. Danish Crown had to re-establish its competitiveness as quickly as possible. The company had to ensure a sustainable settlement for owners, and in this way secure workplaces – and the future of one of Europe’s biggest pig slaughterhouses.

Before had gone two years of difficult economies for pig production in many parts of the world, and a financial crisis had taken root and stopped the expected and necessary price increases in the global pork trade. Today, Denmark has lost its competitive edge, the main reason being that costs in Denmark have in recent years grown significantly, and far more so than in the countries with which we compete. Since 2002 alone, pay levels in Denmark have increased by 25 per cent, while in Germany they have dropped by 5 per cent.

Danish Crown slaughters approx. 20 million pigs a year. This is far more pork than Danish consumers can eat, and over the years we have become specialists at exporting our products. More than 90 per cent of Danish Crown’s production is consumed by consumers outside Denmark, which means that we must sell products in the same markets as slaughterhouses and food producers in other countries.

Today, Danish Crown is a strong player as an export company. In a number of markets – and in a number of countries – consumers are willing to pay more for meat which comes from Danish Crown. However, every time it costs DKK 100 to perform a task in Denmark, it costs only DKK 44 to have it done in Germany. And even though we enjoy a strong position in the high-price markets, the higher prices do not compensate for the increased costs stemming among other things from Danish pay levels.

So, after several years of very strong economic growth, at the beginning of the year we faced having to cut costs to ensure a higher settlement price for the company’s owners. The production of pigs for slaughter in Denmark was falling, and over the past two years this has meant saying goodbye to almost 3,000 DC – also in future employees and ten departments as part of adapting capacity.

In May, we gave ourselves 18 months to improve the company’s competitiveness and earnings by DKK 1.6 billion altogether through focusing on nine different points.

In early September, we were able to report to the Board of Representatives that we were either on track or ahead of plan with regard to all the points under our control, and at the end of the financial year we have a budget for the coming year which – apart from planned payroll cost cuts currently being negotiated – lives up to the plan.

2008/09 has been a hugely challenging year in Danish Crown. However, it has also been a year which shows that we have what it takes to make any changes called for.