Espersen, Royal Greenland CEOs: Poland partnership a win-win

Espersen decided to move production from Denmark to Poland in April to reduce labor costs, and Royal Greenland had too little volume for the facility, the two top executives told IntraFish.

Since Danish whitefish processor Espersen decided to close its plant in Fredericia, Denmark, and move its operations to Poland, where manual labor is cheaper, the company has eyed a number of options.

Espersen landed on a plan on June 14, when it closed a deal with Royal Greenland for the purchase of its plant in Koszalin as part of a larger partnership agreement between the two companies.

With the acquisition of the plant, Espersen became the largest player in the area. Mikael Thinghuus, CEO of Royal Greenland, told IntraFish the deal made sense economically for both companies.

“It is a very large plant, and to run it efficiently one needs to have larger volumes than what we are currently processing there,” Thinghuus said.

“It turned out Espersen needed more space for its production and we had a lot of room and operations that were not enough to run the plant efficiently.”

Under the contract, Royal Greenland will continue to process its raw material at the soon-to-be Espersen’s plant, maintaining production levels and avoiding any disruption in the supply of products to its clients.

“This was part of the deal, they will produce their product but also process ours, and then we will market and distribute it as we have done until now,” Thinghuus said.

In addition, the 1,000 current employees at the plant will maintain their jobs, but under employment with Espersen, which is to officially take over the plant on Sept. 1.

“It was also part of the deal that workers at the plant kept their jobs, it is a good team and the plant is well run, just the volumes were not enough,” Thinghuus said.

“It was very important for us to find a deal in which we could optimize our production.”

For Espersen, the transaction will be a bit more difficult in terms of employment, as it will see 125 employees lose their job at their site in Denmark, which the company announced in April.

Klaus Nielsen, CEO of Espersen, told IntraFish the deal offered a very good opportunity for the company to move its operations, as well as complement its expertise in groundfish processing with flatfish operations.

“In our plants we process cod and haddock, so this is complementing the area where we are experts with the production of flatfish, for which there is a good market,” Nielsen said.

The idea at the moment is to replicate the production lines of the Danish operations in the Polish plant by renovating 8,000 square meters that at the moment are not in use at the site.

The investment cost to renovate the site and set up the new operation was not disclosed. Work will begin at the end of 2017, and the company will implement the different lines gradually throughout 2018. It plans to have moved the entire production by the end of 2018.

In addition, it will have another 2,000 square meters available to “do all kind of interesting projects,” but the company still has not made a decision on future plans for this aisle, Nielsen said.

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