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Vion plans changes in its business model

Processing

The company will be restructuring the organization from three divisions to four business units: Pork, Beef, Food Service and Retail. The company will be restructuring the organization from three divisions to four business units: Pork, Beef, Food Service and Retail. The company will be restructuring the organization from three divisions into four business units: Pork, Beef, Food Service and Retail.

Posted on Mar 27 ,08:50

Vion plans changes in its business model

After a tremendous last year, Vion Food Group is ready to implement its new strategy of ‘Building Balanced Chains’ to respond to the needs expressed by agricultural entrepreneurs and Vion’s chain partners in the Netherlands and Germany. Key financial figures for last years are as follows:
- Revenue increased by 390m million (8.4%) to €5.1 billion in 2019, primarily due to the increased prices for pork products.
- The normalised EBITDA for 2019 was €113.2 million compared to €60.5 million in 2018. The increase was a result of investments in recent years and excellent results achieved by the Pork division.
- Net profit increased from €10.2 million in 2018 to €26.6 million in 2019.
- Working capital increased by €125.5 million due to higher livestock and meat prices.
- In 2019, €54.7 million has been invested in various production locations.

"Vion has had a very good year with excellent figures and a strong balance sheet. This was in part due to the significant demand in 2019 for pork from Asia resulting from the outbreak of the African swine fever there, as well as due to our investments in the modernisation of our production locations. Also, last year there was social unrest in our domestic markets about our food production methods. In 2019, we developed a new strategy with these social developments in mind. The ‘Building Balanced Chains’ strategy was announced at the end of 2018. It continues to build on the development of sustainable and modern chains designed to make our sector strong and resilient, and to provide everyone with healthy future prospects. The choices emerging from this new strategy determine our driving force and way of working for the coming years, and make a positive contribution to a healthy and sustainable food supply,” stated Ronald Lotgerink, CEO of Vion. Exposed to the coronavirus uncertainties, Vion intends to adapt its divisions to a new model of operation, split into four business units: Pork, Beef, Food Service and Retail. The Retail business unit is new and will focus on innovations, plant-based protein and meat products for retail customers.
The coronavirus (COVID-19) is creating major uncertainties in 2020. In supplying food products, Vion plays a critical role in the continuity of society’s food supply. The corona crisis has created a major change in consumption patterns; people are no longer eating out, but are eating at home. The sale of meat to restaurants and hotels has come to a standstill, while deliveries to supermarkets have significantly increased. The turnover of convenience meat products, such as minced meat, is increasing in comparison to more luxurious products. These shifts have a major impact on the valorization of meat, causing the relationship between purchase and selling prices to shift as well. The safety of our employees has the highest possible priority, while we are doing everything in our power to responsibly continue production. Vion plays an essential role in supplying food to society and is working in close cooperation with governments in the Netherlands and Germany to keep the supply of food up to par during this crisis.

Due to the coronavirus, the infrastructure in Asia has become difficult for pork exports. Yet, Asia continues to offer opportunities in 2020, in part due to the persistent African swine fever outbreak there. This also is a potential threat in Europe, which is being monitored in close consultation with governments, said the Group in a press release.

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