Automated and digitized processing plant

Challenge

High Danish salaries made it difficult to compete with pork processing plants in many other European countries, with lower labour costs.

Solutions

Building of a highly automated and digitised pork processing plant, including a range of specially designed robots.

Costs

The total investment in the plant in Horsens has been € 260 million. The investment has paid for itself over a ten-year period.

Result

With the automated and digitised processing facilities, Danish Crown has been able to lower production costs, keep quality high and secure an efficient use of the entire pig and hereby making it profitable to keep pork processing in Denmark. This means, that Danish Crown is able to offer its Danish farmers a fair price for their pigs.

Introduction

Danish Crown is a Danish meat processing company. With an annual turnover of around € 8 billion, the company is one of the larger players on the European pork processing market with pork processing plants in Denmark, Sweden, Germany, Poland, UK and Spain.

Danish Crown was founded in 1887 in Horsens by 500 local farmers and is a cooperative. Today the cooperative is run from its headquarters in Randers, 80 kilometers north of Horsens and is owned by 8.000 farmers. Being a cooperative means that the company’s main purpose is to create value for the farmers. Danish Crown therefore work towards giving the farmers the highest price possible for their pigs.

Tough international competition

The pork processing industry is highly internationalised, and close to 90 % of Danish Crown’s production is exported - mainly to Japan and the USA, with China emerging as a new promising export market. In recent years, competition in the industry has become very tough due to new pork processing plants in Germany, Poland, Mexico and China. In general, Denmark has high salary costs and high overhead expenses. Compared to pork processing plants in Germany for example, Danish expenses per employee and per working hour is three times as high according to Danish Crown.

In 2000, Danish Crown estimated that it could secure the best possible conditions for its Danish farmers by building a large and highly automated pork processing plant in Denmark. The goal was to create a state-of-the-art plant that could process the pigs at lower costs than any of the existing Danish pork processing plants.

Together with the Danish Meat Research Institute (DMRI) at Danish Technological Institute, Danish Crown screened the market for the latest technology available that could be used in order to make the new pork processing plant as efficient as possible, while also maintaining a very high level of food safety.

“The goal was to create a pork processing plant that could process pork at a lower cost than existing plants. In order to obtain that, one needs to automate, so we examined the possibility of automation solutions and advanced control systems that could automate as much as possible in our production”

- Per Laursen,
Vice President Pork Production, Danish Crown

In 2005, Danish Crown opened the new plant in Horsens. According to Per Laursen, Vice President Pork Production at Danish Crown, it is one of the World’s most modern slaughterhouses and with the capacity to slaughter 103.000 pigs a week, the plant is between the ten largest pork processing plants in the World.

New technology helps increase efficiency and sales

The new pork processing plant in Horsens includes a long range of automated processes and robots. Different Danish manufacturers have produced most of the machines and robots for Danish Crown Horsens, not because it was an intentional choice, but because Denmark has many of the leading companies within this area due to the country’s tradition in processing pork meat, Per Laursen states. Much of the pork processing equipment has been supplied by SFK Meat System A/S in Kolding and Frontmagic, whereas Finnish Taifun Engineering Oy. has supplied most of the technology for conveying, collecting and handling of by-products for Danish Crown Horsens.

One of the most remarkable solutions, according to Per, has been the IT-system that has been built in relation to the pork processing plant. When the pigs have been delivered to the plant in Horsens, they are photographed and scanned. Each pig’s data is sent into the plants IT-system, including data about the pig’s size, weight, meat percentage etc. The data then helps ensure that the machines cut the pigs in exactly the right way.

Furthermore, a MES-system (Manufacturing Execution System) makes it possible to transfer and exchange data between the facility-floor system and the central sales systems at the headquarters in Randers. This makes it possible for the sales team in Randers to obtain knowledge about what exact type and quality of meat they have in stock. Knowledge about the processed meat in stock gives the sales team an advantage in relation to the competitors, Per states. For example, customers in different parts of the world have different preferences regarding marbled or lean meat. The sales team now knows, in detail, about the meat they have in stock and can use this in making much more targeted and customer specific marketing and sales.

“The MES system is our major competitive advantage. The system created the possibility for us to sell processed pork to customers with certain features, even before the processing of the pork has finished.”

- Per Laursen,
Vice President Pork Production, Danish Crown

Manufacturing Execution System (MES)

An MES system is a system that improves data exchange between the business and facility-floor systems. Furthermore, the system provides data that helps the company decide on how to optimize current conditions on the plant floor in order to improve output. 

Another important aspect of pork processing is hygiene. The facilities in Horsens provide a high level of hygiene when handling the meat, which is also an important competitive advantage in the food industry.  The high level of hygiene is among other reached by automated cleaning of the cutting knives after each pig has been processed.

Results: Profitable production in Denmark

Since the pork processing plant was established 11 years ago, it has exceeded all expectations, according to Per Laursen. Today, a third of all pigs processed in Denmark are slaughtered at the plant in Horsens. The plant is profitable, Danish Crown have been able to keep processing costs down and as a result, the price they are able to pay their farmers for their pigs have gone up.

“We get, of course, measured by our owners on the profit that we generate through our operations but it all comes down to how much a Danish farmer can get for a Danish pig in a Danish pork processing plant compared to what they get elsewhere. And we have a significantly lower costs than in all other slaughterhouses in Denmark.”

- Per Laursen,
Vice President Pork Production, Danish Crown

Even though other expenses in relation to pork processing have increased (contractual wages have increased, energy has become more expensive, etc.) automation and new digital solutions have helped lower the expenses per kilogram of meat produced at the plant in Horsens. According to Per, the plant in Horsens is by far the most profitable pork processing plant in Denmark today.

Also, Per states, work in a pork processing plant can be hard and repetitive and In order to improve conditions for the workers at the pork processing plant, robots now do all heavy lifting in the plant. Danish Crown will therefor also continue to use technology in the future to improve conditions for their workers even more, Per Laursen states.