Denmark's food business is on track to emerge as a premier Scandinavian source of meat as food minister Mogens Jensen and his team sealed an agreement with China that will boost the two countries' commodities sector.
Danish Crown, Europe's leading pork producer, rolled out a new processing facility in China on Wednesday to produce packaged meat for the region's growing clientele.
The company's first processing plant in Shanghai will turn frozen meat products like sausages and bacon imported from Denmark into chilled and packaged products.
Danish Crown said for the first 5 years, all the packaged meat products will be sold on Alibaba's e-commerce outlets. Hema stores will also promote and sell these products offline.
The 17,000 square-meter facilities is expected to produce 14,000 tons of processed pork products every year. The factory was opened as prices of pork in the world's leading consumer of meat reached new highs after an African swine epidemic ravaged China's massive hog farms.
According to Jensen, China has a huge appetite for pork and the launching of the Shanghai plant is only possible "because the Chinese people trust Denmark and our high level of food security."
Danish Crown's goal is to sell its meat products at a 10-15 percent premium compared to domestic goods. The company already exports huge amounts of pork to the Chinese mainland and has seen its exports increase to around 21 percent in the second half of 2019 to 250,000 tons.
Market analysts at RaboBank estimate that figure to climb further as they expect China's pork production to drop more than 20 percent this year. Robust orders from Chinese consumers help to cushion weak demand in the European region because of rising prices and interest in plant-based commodities.
Denmark exported more than 200,000 tons of pork to China in 2018 valued at around 2.4 billion kroner - a figure seen by economists to soar in the next coming years.
Danish Crown signed a landmark partnership with e-commerce behemoth Alibaba and the company's meat products will be accessible to the Chinese online trader's 467 million subscribers.
Meanwhile, a team of Chinese quality inspectors is set to visit the Danish Crown's facility for beef next week. China's welcoming of Danish Crown's beef products is projected to give the Danish firm more than 300 million kroner of income per year.
