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Danish Crown is set to shut down its operations in Pinghu, near Shanghai, China, following a strategic review, putting 112 jobs at risk.

The Danish meat processor has informed both customers and employees of the decision as it moves to either sell or close the facility.

The factory, which opened in 2019 as part of the company’s expansion into China, has failed to achieve profitability despite efforts to turn the business around. A strategic review, accelerated by the company’s new executive management, determined that continuing operations in Pinghu was no longer viable.

Danish Crown Group CFO, Anders Aakær Jensen, said: “It is clear to us that the operations in Pinghu is not the right strategic fit for Danish Crown. Our preference is to divest the business, and we can confirm that we have signed a letter of intent with a preferred buyer and agreed terms for a divestment. While these talks are promising, we expect they will still take a few months to conclude."

“Our strategic review has delivered two clear options for us; to either divest or to close the site and repurpose the quality equipment elsewhere in our global supply chain. To carry on our current set-up in Pinghu is no longer a viable option, and therefore we have decided that the time is right to bring those operations to an end while we work diligently to reach a final decision about the future of the factory itself.”

Danish Crown plans to finalise a decision on its remaining Pinghu facilities by early summer and will provide an update in due course.