Danish Crown Says Chinese Pork Demand Subdued, Set To Cut 550 Jobs
Chinese consumption of pork remains subdued and normalisation could take up to six months, said Danish Crown’s CEO, who also told Reuters the company would lay off 550 staff in Denmark and Germany and cut capacity at its Essen plant by 40%.
Chinese pork demand is weak despite relaxation of the country’s COVID-19 policies as many people continue to avoid restaurants, said Jais Valeur, the head of Europe’s biggest pork producer.
“Right now I don’t see any signs that Chinese imports are on the rise,” Valeur told Reuters in an interview, adding that the Chinese market would probably normalise within six months.
Danish Crown also said it would lay off around 550 staff in Denmark and Germany, with 400 of those cuts from its plant in Essen, Germany, where it is slashing capacity by 40%. Earlier this month, the company said it would shut a plant near Hamburg that employs 200 people.
The company, which produces nearly 20 million pigs each year, opened a processing plant outside Shanghai in 2019. The plant is currently running at around one-third of capacity, largely unchanged from levels during the lockdown period.
“Eating out is really what is driving consumption in China. But what we see now is that a lot of people are scared and stay away from restaurants,” Valeur said.
“There’s a huge desire in China to spend and to go out and eat with friends. All this has been suppressed during the lockdowns,” he said. “In about six months’ time, I think we will see a normalisation in China just as we’ve seen in Europe.”
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