Danish Crown wants to sell shares

Monday, December 5, 2011

Smithfield Foods is well known as the world's largest pork producer. But the world's largest pork exporter isn't on this continent.

Danish Crown, 124 years old and co-operatively owned by 9,800 farmers, slaughtered 19.4 million hogs in 2009/2010 in Denmark, Britain, Sweden and Poland. It sells to 130 different countries with annual revenue of C$8.44 billion and its largest export market is the United States. It wants to raise C$1 billion in development capital and it won't come from cash-strapped farmers. So "going public" by selling stock on an exchange is being considered. The goal, according to board chairman Niels Mikkelsen, is to become one of the three largest food companies in Europe.

However, Henrik Mortensen, chairman of Danske Svineproducenter, the national association of Danish pork producers, has warned that farmers must be aware of the consequences of such a step.

In early October, Danish Crown laid off 400 employees in Demark packing plants because fewer pigs were being sent to slaughter than anticipated. According to a press release: "High labour costs continue to pose a major challenge for the company, which explains the continued strong focus on capacity." BP