Poor 2016 results spur Tulip into action

A predicted operating loss for Danish Crown subsidiary Tulip Ltd has led the business to embark on an extensive recovery programme. 

In its results for the year to 30 September 2016, it posted an operating loss of £22 million, with revenues decreasing 9% due to the “loss of significant contracts”.

The business was also hit with raw material price increases and a reduction in factory operating efficiency, seeing its gross profit margin fall from 8.6% in the previous year to 5.7%.

At the time, Tulip Ltd said: “Fierce competition in the retail market, increasing raw material prices, the loss of significant contracts and internal issues with productivity and pricing are amongst the challenges currently facing Danish Crown’s UK subsidiary Tulip Ltd. The company will end the year with a loss.”

To help improve the situation, Tulip introduced a long-term recovery plan which included the appointment of Steve Francis as CEO in September 2016, as well as a divisional reorganisation. The business was split into Tulip Agriculture, Tulip Fresh, Tulip Food Company (UK) and Dalehead Foods.

Francis said: “Our immediate priority was to launch a major rebuilding and performance improvement programme, focusing on restoring excellent customer service, re-empowering the manufacturing sites to become true customer-focused centres of excellence, and to focus on producing great products reliably and efficiently while speeding up customer response times.”

He added that the recovery plan has been going well since being introduced.

“This rebuilding programme has since progressed well: customer service levels have been restored and some important new customer contracts have been secured,” said Francis. “I am pleased to report that the company is making great progress on its path to recovery.”

Parent company Danish Crown still sees the UK as a viable market and earlier this year announced its four-wheel drive (4WD) five-year strategic plan, with the UK highlighted as one of four key domestic markets in which Danish Crown is seeking to maintain and enhance its market leadership positions.

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