Heavy investment by the PHW Group
5 percent growth in turnover to 1,080 million euros last year / ‘Wiesenhof’ sales contribute over 600 million euros / 90 million euros invested / Range extension to organically reared chickens, ducks and turkeys / Now also salmonella-free feed
Rechterfeld/Hamburg 19 February 2003. The PHW Group (Rechterfeld) continued growing in the financial year 2001/2002 (30.06.): the family-run Group’s total turnover, consolidated and adjusted for internal sales, rose by over 50 million euros, or 5 percent, from 1,030 million in the previous year to 1,080 million euros in the financial year ended. ‘Wiesenhof’, Germany’s leading poultry brand, contributed almost half of the PHW Group’s turnover increase with 22 million euros, achieving sales of 605 million euros (previous year: 583 million euros). The Animal Nutrition and Animal Health, and Human Nutrition and Human Healthcare divisions also managed to generate growth: turnover in the animal nutrition and health field rose by 1.7 percent from 322 to 327 million euros, while the human nutrition and healthcare sector went up by 11.5 percent, from 53.7 to 60.7 million euros. The Polish poultry processor Drobimex-Heintz, in Stettin, in which the PHW Group has had a 90% majority shareholding since the 2000/2001 financial year, has been fully consolidated for the first time. The rest of the PHW Group‘s total turnover was generated by ‘breeding and franchising’, upstream of the ‘Wiesenhof’ brand.
Investment leaps up to 90 million euros
The PHW Group invested heavily again last year, the 90 million euros investment volume being noticeable above the previous year’s total of 50 million euros. The main investments were over 40 million euros in the ‘Wiesenhof’ brand production locations, which included expanding the poultry sausage plant in Rietberg and constructing a new hatchery in Möckern. About 26 million euros were invested in the field of animal nutrition and health. The company has developed an elaborate process in the animal feed sector that enables the production of salmonella-free feed in its own mixed feed plants.
Just under 15 million of the total of 90 million euros invested went into the Cuxhaven operations. TAD Pharma GmbH put a modern high-rack warehouse into service. Lohmann Animal Health has been producing in a new feed additive plant since spring 2002. The extension to the vaccine plant will start production in the current financial year, and research into vaccines is to be concentrated at Cuxhaven as well. The Cuxhaven operations, Lohmann Animal Health and TAD Pharma, spent about 6 million euros on research and development last year.
This year’s investment is being concentrated, among other things, on a new central laboratory and extending the PHW headquarters building in Rechterfeld.
In the 2001/2002 financial year the PHW Group had about 3,370 employees, compared with 3,210 in the previous year. Counting its foreign shareholding in Drobimex-Heintz GmbH in Poland, this brings the total number of employees to over 3,870.
‘Wiesenhof’ boosts the consumption of poultry meat
Germany’s per capita consumption of poultry meat climbed from 16 kg in 2000 to 18.9 kg in 2001. Paul-Heinz Wesjohann is now expecting a figure of about 18 kg per head of the population in 2002. In his view, this stable and high consumption rate is no longer attributable to the crisis in the meat trade which forced poultry consumption up in recent years. He also regards the positive trend in the poultry market as the result of the ‘Wiesenhof’ stated origin and quality concept having a positive effect on consumption. The “quality, safety and transparency” policy is based on the “single source” principle, requiring all the ‘Wiesenhof’ production stages to take place in Germany. The 700 or so partner farms that rear the birds are named on the origin labels. All poultry slaughterhouses and processing plants within the Group are ecocertified and, since October 2002, certified for quality assurance too.
An important element in the ‘Wiesenhof’ brand’s quality policy is feed from its own mills, which have meanwhile obtained GMP (Good Manufacturing Practice) certification. The use of animal proteins (animal, fish or meat and bone meal) was discontinued as early as 1996, and the feed has been free of antibiotic performance enhancers since 1997. In addition, ‘Wiesenhof’ is the only European supplier to guarantee, and provide proof, that the feed from its own mills contains no genetically modified soya, and is also produced free of salmonella.
Greater involvement in the turkey and duck market
The management of the PHW Group - Paul-Heinz Wesjohann together with his son, Peter Wesjohann, and Harm Specht – consider there is still enormous potential for poultry specialities in Germany: although Germans are now eating more poultry than beef, their consumption of chicken meat is still significantly below the European average and they are only among the European leaders in their consumption of turkey meat. The PHW Group is keen to take additional advantage of the positive trend by considerably extending its range, including the start-up of poultry sausage production in Rietberg and the launch of duck specialities that took place in October 2002. The ‘Wiesenhof’ brand’s increased demand for turkey meat produced in Germany can be covered by the acquisition of 50 percent of RWS, the turkey producer in Steinfeld. With its annual production capacity thus amounting to about 70,000 tons, the PHW Group now ranks among the leading turkey producers in the country. The ‘Wiesenhof’ quality policy covers all the brand’s new product areas as well.
The Management is disappointed by the development of organically reared chickens, which were launched on the market a year ago. Despite offering a comprehensive range, sales have been minimal. ‘Wiesenhof’ carries out all forms of breeding, from conventional floor husbandry and free range to ecological rearing, under the same stated origin and quality criteria.
Concern over large-scale imports
Despite the ‘Wiesenhof’ brand’s growth, the trend in the rate of supply from German production, which fell back overall from 70 to about 64 percent, is giving Paul-Heinz Wesjohann cause for concern. The reason is an increasingly large quantity of imports, especially from Thailand and Brazil. This applies equally to chicken and turkey, he stated, and is leading to fierce competition and pricecutting, in which a quality brand should not get involved. Politicians have meanwhile been complaining about quality problems in the case of imports that might, in Paul-Heinz Wesjohann’s opinion, turn out to be “counterproductive as far as further growth in poultry meat consumption is concerned”. The aim must be to maintain consumer approval, which has risen enormously in recent years, through high-quality and safe products, if the crises that have beset other meat sectors are to be avoided.
New export opportunities
Paul-Heinz Wesjohann sees new growth opportunities in exports. In large parts of western and eastern Europe the trend towards high-quality and simultaneously safe poultry products is likely to continue. In his view, with all ‘Wiesenhof’ slaughterhouses and processing plants now certified in line with a globally applicable environmental management system, and ‘Wiesenhof’ production having also obtained the Quality Assurance certificate for chickens and turkeys in October 2002, there may now be a markedly increased demand in international markets too. With its stated origin and quality policy for chicken and turkey meanwhile recognised throughout Europe, the Group is keen to use its strong position in the German market to promote exports. With its shareholding in Drobimex-Heintz, the poultry processor, the Group has already taken a major step forward in Poland and is looking for market leadership.
All in all, Paul-Heinz Wesjohann is expecting an increase in consumption in the current year compared to 2002. While the PHW Group is set to achieve growth in overall turnover, sales of the ‘Wiesenhof’ brand will probably only reach the previous year’s level because of market prices falling. An improved profit situation is, however, necessary to sustain the on-going high levels of investment needed to keep up process quality standards at all production stages. Competition from cheap imports should not impinge upon the ‘Wiesenhof’ brand’s pricing policy. The trade and consumers must – according to Paul-Heinz Wesjohann – be prepared to pay an appropriate price for quality and food safety.
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