Vion reports disappointing result

23 May, 2012

Increased prices on raw materials has put heavy pressure on food producer Vion over the last year, with the company reporting a 53% drop in its operating results (EBITDA) to €90m. This was despite a 7% increase in turnover in 2011 to €9.5bn.

Home markets in the UK, Netherlands and Germany proved particuarly challenging during 2011, but the comany said it responded well to the growing market demand for meat from the BRIC countries.

CEO and chairman, Uwe Tillmann: “In 2011, Vion paid high purchase prices for pigs and cattle. Unfortunately, the prevailing economic conditions prevented us from consistently transferring these increases to Vion Food’s sales markets. As a result, our financial results in 2011 were disappointing.”

Vion said that the stagnating economy and restricted consumer expenditure had clearly impacted on performance. It said that the imbalance between supply and demand and highly competitive pork market had made it difficlt to pass on the high pig prices and increased input costs, while beef activities had also felt the pressure.

It said that improvements in operational cost efficiency will remain a key focus in order to achieve sound returns.

However, there were a number of successful development in added value food and ingredients products in 2011, in pork, beef, chicken and convenience products such as hamburger concepts and Hackplus®, the hybrid meat product. These were launched in partnership with suppliers and customers and aimed to capitalise on key trends of quality, health, sustainability and animal welfare.

The ingredients business performed below the level of 2010, but the company reported that this was as expected in a challenging market, and renewed its commitment to innovation and investment in the market. It strengthened its positon in the global gelatine market by acquiring Eastman Gelatine, and the remaining shares in Rousselot Gelatinas do Brasil SA. Banner, the industry leader in gelatine-based softgels for pharmaceutical usage, showed excellent results.

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