PHW Group about to make major investment in Germany

Company to invest € 90 million in current year / Group sales increase by 21.7 percent to € 1.93 billion / Wiesenhof brand benefits from ongoing trend in favour of poultry products / Workforce increases to 4,761 regardless of sale of TAD / Animal Nutrition and Animal Health business division sees growth of 33.5 percent / Dieter Bohlen on board as advertising partner 

Rechterfeld / Hamburg, 13 February 2009. Stronger demand for chicken, the increasing trend in favour of convenience products and the expansion of the export business saw the PHW Group generate significant additional sales in the 2007/2008 business year  (fixed date 30.06). The Group increased sales by 21.7 percent to € 1.93 billion (previous year: € 1.58 billion). The Wiesenhof business division saw an increase of 23.4 percent to € 1.1 billion. PHW-Chairman of the Board of Directors, Paul-Heinz Wesjohann, had the following to say about the development: “Irrespective of the extremely volatile raw materials markets and considerably higher feedstuff costs, we have consistently maintained our quality strategy at Wiesenhof. In the last business year, we benefited from the increased popularity of brand poultry in Germany.” 

Irrespective of the general economic development, the PHW Group has invested more than € 90 million in the past business year, predominantly in the Lower Saxony sites. The new construction of an ultra-modern turkey slaughter and processing plant in Wildeshausen, Lower Saxony, and a wide-ranging expansion of the processing plants at Lohne and Dannenberg, accounted for the lion’s share of the investment. In autumn, the PHW Group took over the Dannenberg production site of an insolvent food manufacturer and modernised operations. In Cuxhaven, Lohmann Animal Health is building a new logistics centre, while building work is already underway on the extension of the vaccine production plant. In April, Nutrilo, also located in Cuxhaven, will complete the new building for a technology centre.  

In the 2007/08 business year, the PHW Group invested € 77.4 million (previous year:  € 69.4 million). The Wiesenhof division accounted for some € 31.2 million of the investment, including new buildings or modernisation work in Bogen (Bavaria) and at Allfein in Zerbst (Saxony-Anhalt).  

Wiesenhof boasts new convenience products and Dieter Bohlen on TV 

Wiesenhof’s core business area saw an increase in sales in chicken, duck, convenience products and poultry sausages. This was attributable to a higher per-head consumption of poultry in 2007 at 18.0 kg. Preliminary estimates suggest the figure increased to 18.5 kg in 2008. Brands such as Wiesenhof benefited more than others from the increased demand for poultry. The Wiesenhof quality and origin concept – the principle of “Everything from a single source” is, among other things, understood to mean clearly labelled poultry products, feed from our own feed mills, GM-free soya and more than  800 contracted farmers – continued to provide the basis for the brand’s success in the past business year.  

The share of convenience products in the entire Wiesenhof range continues to rise, including the latest range line, “Mahlzeit”, from Wiesenhof – ready cooked poultry meals with sauces, noodles and rice. These ready-meals are aimed at consumers expressing an increasing demand for quick and simple-to-prepare meals. In 2009, Wiesenhof will be stepping up its marketing activities. From April, Dieter Bohlen will be advertising Wiesenhof’s Bruzzzler on television. Additional radio and newspaper advertisements with the star are aimed at making poultry sausages more popular.  

Business development: Feedstuff prices at record high

As in the previous year, the past business year was characterised by a sharp increase in feed costs. The step-by-step increase in the sales price of poultry products failed to counter this development. The PHW Group does not expect the situation to improve this year either. In the first few months of the current business year, the raw material prices again reached a record high and only started falling in October 2008. 

The two subsidiaries in Poland, Drobimex and Bomadek, which both produce poultry products, accounted for 35.6 percent of the increase in sales in the PHW Group (sales in 2007/2008: € 139.5 million). 

The poultry breeding sector, comprising parent stock husbandry, rearing farms and hatcheries all located in Germany, also saw an increase in sales in the same period. In the 2007/2008 business year, sales were € 108.9 million (previous year: € 93.1 million). The previous year’s investment in the new building of a hatchery in Rechterfeld had a particularly positive effect. It is one of the world’s finest hatcheries in respect of animal health, animal protection, cleanliness and hygiene.  

Animal Nutrition and Animal Health sees 33% growth 

The Animal Nutrition and Animal Health business sector is witnessing further significant growth. Sales boomed by 33.5 percent and reached € 540.6 million in the past business year.  

Lohmann Animal Health (LAH) and its subsidiaries abroad generated sales of € 190.3 million (previous year: € 166 million) in feedstuff additives, poultry vaccines and pharmaceuticals for animals. With its vaccines against zoonose pathogens, LAH is one of the world’s leading vaccine manufacturers. LAH invests about € 6 million in research, focusing on animal health and food safety. This includes supporting the Centre for Zoonose Research at the University of Veterinary Medicine Hanover, earmarked for Hanover, by way of an endowed chair.  

Due to the significant increase in the production quantity and the increase in sales prices – as a result of higher raw material prices – the compound feed producer MEGA generated significantly higher sales (2007/2008 business year: € 357.7 million; previous year: € 211.9 million). The two PHW companies GePro Vertriebsgesellschaft and PetCom Tierernährung together account for sales of € 85 million (previous year: € 75 million). GePro, which produces biofuel on the basis of poultry fats, intends to expand its capacities in the current business year. Some 74,000 tonnes of CO² will be saved annually by using the biological fuel “SP-Power” in the company’s truck fleet and for other customers. 

Human Nutrition and Healthcare: Nutrilo expands foreign business 

As a result of the discontinuation of the business sector generic drugs – the company TAD Pharma was sold in November 2007 – sales revenues in this business division fell by 61 percent to € 34.4 million. In the past business year, Nutrilo Gesellschaft für Lebensmitteltechnologie saw an increase of 18.5 percent – sales increased from  € 29.1 million to € 34.4 million. National and international business played a part in the growth. In conjunction with an American company, the subsidiary Nutrilo set up a production facility in Vineland, New Jersey. The PHW Group has a majority holding in this company. The new company, Nutri-Mack, began producing nutritional additives there in December 2008 in the form of stickpacks, tablets and vitamin mixtures for the American nutrition and beverage industry. 

Personnel: Additional jobs at Wiesenhof  

 In the year under review, the PHW group had more employees than in the previous year (2007/2008: 4,761 employees; previous year: 4,645) despite the sale of TAD Pharma. More than 200 new jobs were created in the Wiesenhof business division, where the company is increasingly using its own personnel as opposed to outside staff. LAH, Nutrilo and the feed mills also took on additional staff. The PHW Group still requires vets and animal keepers.  

Irrespective of the positive company development, PHW CEO, Paul-Heinz Wesjohann, warns against too much euphoria: “In the past business year, the price of poultry specialities has not increased in line with the higher raw material price of feedstuff and increasing energy costs.” 

Due to the falling raw material prices, the PHW Group expects sales in the current business year to match the previous year’s sales at best.