Westfleisch masters "challenging 2020"
According to CFO Carsten Schruck, Westfleisch has "mastered the challenging year 2020 properly". The meat marketer based in Münster was once again able to decouple its slaughter figures from the negative industry trend, increase sales slightly and even grow significantly faster in the processing area than the overall market.
"2020 was an extremely challenging year, mainly because of the corona pandemic and African swine fever," explained Carsten Schruck at the "Westfleisch-Tag", which was held digitally this time. "We are all the more pleased that we did well and that we can once again pay our more than 4.200 agricultural members additional special bonuses in addition to the attractive dividend of 4,2 percent on their business assets.
"Compared to 2019, Westfleisch's annual turnover increased by 1,3 percent to 2,83 billion euros. Net income for the year fell by EUR 2,6 million to EUR 8,1 million, mainly due to the additional costs associated with the corona pandemic and African swine fever.
High corona costs
After the temporary closure of the Coesfeld site, experts developed an expanded hygiene concept for all production sites to protect employees and keep operations running despite Corona. Among other things, a close-meshed test strategy was installed; 1 million PCR tests performed and 2 million surgical masks purchased. Overall, these measures cost Westfleisch more than 22 million euros. “We had to react quickly and prudently to the challenges of the pandemic. The security of supply for dealers and consumers and the purchase guarantee for the agricultural marketing partners was and is our top priority. Saving was simply not the order of the day under these conditions,” said Schruck. Furthermore, Westfleisch tests all production employees at all locations every day. The advance of ASF in Germany also posed problems for the meat marketer. Because China stopped all imports, inventories had to be devalued by a significant amount.
Strong consumer demand
This contrasts with the positive developments in the retail sector. Among other things, the "hamster purchases" of consumers supported the business development in the sausage, convenience and self-service goods sectors, reported Johannes Steinhoff, Board Member for Further Processing & Technology. Sales at the Westfleisch subsidiary Westfalenland rose by 19,9 percent to 770 million euros. At 148.000 tons, sales were 14,7 percent higher than in 2020 and thus grew faster than the overall market (+4,2 percent). Business at Gustoland also developed positively. Here the company achieved sales of 41.000 tons, an increase of 7,1 percent over the previous year. “Corona has changed the purchasing behavior of consumers. The importance of products of regional origin is increasing, and the demand for organic food is increasing," said Steinhoff. At the same time, the economic consequences of the pandemic are noticeable at the shop counter. "The number of consumers who have to pay attention to the price has increased noticeably," says CEO Steinhoff.
Beef market – Westfleisch above the industry trend
Westfleisch slaughtered a good 7,5 million pigs (including sows) last year – a drop of 3 percent. The decline was therefore a little less pronounced than in the overall market (-3,5 percent), said Steen Sönnichsen, Board Member for Production, Sales, Export and Purchasing Agriculture. When it comes to slaughtering large cattle, Westfleisch is still well above the industry trend, with the number of slaughterings remaining the same. The cooperative slaughtered around 436.000 cattle last year. The overall market in Germany, however, lost 4,2 percent. In addition to the corona pandemic, the price drop in bulls, cows
and fine parts, as well as inexpensive steak items from South America, put the market under pressure,” said Sönnichsen. On the other hand, according to the Management Board, “decent retail sales of minced meat and steaks” and high consumer demand during the Christmas season had a positive effect.
Net income remains at a respectable level
The members also benefit from the success of their cooperative. As in the previous year, the committees are recommended to pay a dividend of 2020 percent on the business assets for the 4,2 financial year. In addition, the cooperative pays out special bonuses for all animal species of around 2,4 million euros to the contract farmers.
