Vion has said it is not ruling out closures as it plans to restructure its business

Vion has said it is not ruling out closures as it plans to restructure its business

Dutch meat processor Vion has announced it will be closing some of its European sites as it embarks on a restructuring programme in a bid to improve profitability.

As well as shutting plants, Vion plans to invest in its operating sites "to facilitate more sustainable production".

"The closure of a number of Vion Food locations in Germany cannot be excluded", it said.

Vion has already closed four locations, sold seven and disposed of its ingredients arm in the last six months.

The firm is looking to invest an additional EUR100-150m (US$135-202m) into the business, part of which it can finance through cost reductions, CEO Michiel Herkemij said. However, he added "in order to speed up the process of improvement" the firm was also "investigating" the possibilities of bank financing.

To try to grow, Vion wants to intensify exports to Asia and start shipments to Africa. It spoke of "achieving a good balance" between fresh products and added-value products.

According to a report in Reuters, Vion is seeking strategic tie-ups in China and aims to "retool remaining sites to make higher-margin produce such as ready meals".

No one was available at Vion to comment when approached by just-food.

Show the press release

As part of a new strategy, a key focus for Vion moving forward will be a concentration on cost reduction and investment in its operating sites to facilitate more sustainable production. Cost reduction can be achieved by better cooperation between the various locations, a coordinated approach to purchasing, and a more efficient supply chain. The closure of a number of Vion Food locations in Germany cannot be excluded.  

Michiel Herkemij, CEO of Vion: ‘We have gone through a turbulent period, and it is necessary to thoroughly reorganise the company. Because of the actions already taken, Vion is, at this moment, financially stable again and our debts have been eradicated. We have built a strong foundation for the future, and dare to look forward again, and focus on the future. The main aim is to restore the company to profitability.'  

Currently, five of the six business units are doing well. Currently, five of the six business units are doing well, without Dutch pig slaughterhouses and related chain activities requiring improvements. Herkemij: ‘In the next two years we will invest an additional 100 to 150 million euros. We can finance part of these investments through cost reductions, but in order to speed up the process of improvements, we are also investigating the possibilities of bank financing.’  

 

Strategy

Vion Food's strategy is aimed at the following six core values:

•       Customer focus

•       Product quality & food safety

•       Operational execution

•       More intensive cooperation with farmers

•       Enhanced performance of the company and of the various business units

•       Winning back the confidence of stakeholders  

 

Key priorities

Specific priorities for the company in the near future:

•       Investment in the re-structuring of Vion’s processing/production footprint (€100 - 150 million)

•       Intensify exports to Asia and start exports to Africa

•       Implement a closed chain with retailers and farmers

•       Introduce the Vion quality standard as the sector standard

•       Reduce costs by €100 million over the next two years

•       Achieve a good balance between fresh products and added value products   

Changes to the organisation

In order to regain a healthy organisation, Vion has had to implement a large number of changes during the last six months; we have closed four locations, sold seven locations, and we have had to dispose of Vion ingredients. Necessary changes were also made to the organisation; the company has a new CEO, a number of new members of the Supervisory Board and a new finance director.          

By appointing Michiel Herkemij, Vion has managed to attract a CEO with international experience. At Vion he is concentrating on the strategic changes required to restore customer and supplier confidence in the company, and has the unanimous support of the Supervisory Board. The composition of the Board has also changed, and in addition to Supervisory Board members representing the ZLTO, independent professionals from the retail sector and the industry also have a seat on the Board.  

Original source: Vion