Strategy: Vion invests in regionality
Strategy

Vion invests in regionality

Mario Jahn
Altenburg abattoir has built and is commissioning new packaging lines.
Altenburg abattoir has built and is commissioning new packaging lines.

GERMANY, Altenburg | Perleberg. The Altenburg slaughterhouse is being expanded to include cutting, processing and packaging. New refrigeration capacities are built in Perleberg.

By Dirk Lenders, LZ

Vion is responding to the lower supply of slaughter animals and declining consumption by building demand-driven regional programs for retailers. In eastern Germany and Bavaria, the meat group is investing almost 50 million euros for this purpose.

The German meat industry is facing major changes. Consumption of pork in particular is falling steadily, as is the availability of slaughter animals. Employees are hard to come by and wage costs have risen significantly due to new collective wage agreements. Profitable exports to Asia have slumped following the outbreak of African swine fever (ASF). This is putting pressure on companies' returns.

Establishing a balanced supply chain

Dutch-German meat giant Vion Food Group (2021 sales: €4.6 billion) sees a way out of the industry crisis in building balanced supply chains, which the company calls "Building Balanced Chains (BBC)." These demand-driven, closed value chains include the organic program "De Groene Weg," animal welfare concepts such as Good Farming Star, and regional programs in Bavaria. Vion now wants to take account of the trend toward more regionality in eastern Germany, where the company has two of its 16 German sites. Under the internal project name "BBC East," Vion has invested nearly €50 million since 2020. The beef slaughterhouse in Altenburg has been expanded to include cutting, processing and packaging. Essential to Vion's plans is the commissioning of nine fully automated case-ready lines for the production of pre-packaged fresh beef and pork products. Five lines, featuring technologies such as robotic packaging, high-speed portioning, precision dicing and batching, and high-performance minced meat production, will start up in Altenburg. Four lines will increase capacity for volume increases in Großostheim, Bavaria. Here, the convenience range will be expanded. Refrigeration capacities at the pork slaughterhouse in Perleberg, Brandenburg, have also been expanded.

Direct link

"Our strong position in eastern Germany, our experience from the other regional cooperations and, last but not least, our strategy of demand-driven supply chains make us a strong food retail partner in the new federal states," says Philippe Thomas, COO Retail at Vion. With the expansion at the Altenburg abattoir, the site is establishing itself as a direct link between production and retail. To this end, the next step will be to carry out not only slaughtering but also cutting and further processing in Altenburg itself. The plant, which currently has a capacity of 2,500 cattle and 800 t of meat per week, is to provide up to an additional 500 t of processing capacity for beef and pork per week in two-shift operation in the future. In the first stage, 200 additional jobs are planned, with up to 100 more jobs in a possible final expansion stage.

With their portfolios, the Altenburg and Großostheim sites are to complement each other in the future. Up to 400 different articles are possible. In addition, Großostheim is to serve Bavarian customers and Altenburg customers in Thuringia, Saxony and Saxony-Anhalt even more specifically with refined, shelf-ready products.

Location security in the east

According to David De Camp, COO Beef, with these investments Vion wants to make "a clear commitment to the region, to the security of our operations in Thuringia and Brandenburg, and to the cattle and pig farmers in the catchment area of our Altenburg and Perleberg sites, even in difficult times like those we are currently experiencing."

This is probably necessary, because Vion, like others, is recording a significant decline in slaughterings in Germany. Last year, seven million pigs were hooked, eight percent less than in 2020. The number of cattle slaughtered in 2021 was also almost 100,000 below the level of 2019, at 635,000 animals.

Source: Lebensmittel Zeitung 32/2022, afz - allgemeine fleischer zeitung 34/2022 / dfv Mediengruppe

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