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2120 final report.pdf - Agra CEAS Consulting

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THE SOCIO-ECONOMIC IMPLICATIONS OF THE VARIOUS SYSTEMS TO KEEP LAYING HENSA1.3.3. Egg processingThere is a high degree of concentration in the Danish egg processing sector with just threecompanies responsible for all production. Whilst the processing businesses at Danæg A/S andHedegaard Foods are linked in to their egg packing activities, the largest processor in Denmark,Sanovo, is not heavily linked in to the Danish production/packing sector 57 and operates globally withfacilities in Spain and Germany in the EU. Facilities are owned in Bulgaria and Venezuela and thereare plans to construct facilities in South America and the Far East within the next couple of years.Denmark produces both liquid and dried eggs (through Sanovo) and there is limited differentiation ofprocessed product by production system, much of which is exported to the UK.A1.3.4. Main egg processorsThe largest processor in Denmark is Sanovo who break around 11,000 tonnes of eggs per year,equivalent to just more than 40% of the approximately 25,000 tonne annual consumption, althoughmuch of Sanovo’s production is exported with the UK, Japan, Russia and the Far East being importantmarkets. Half of Sanovo’s eggs are imported from the EU-15 with a further 35% sourced from newEU-10 Member States.As a global player and without ownership of Danish production facilities, Sanovo is able to sourceeggs globally wherever they happen to be cheapest (given quality requirements) 58 . This is the reasonbehind having and developing facilities in South America and the Far East. Some differentiatedproducts require contracts with individual farms to ensure the correct egg characteristics (usuallythese are dependent on a particular feed regime). Differentiated product requirements cannottherefore simply be met by using the cheapest eggs. Meeting such needs requires long-termrelationships with suppliers from within the EU. Sanovo is profiled in Box A1.9 and Danæg Productsin Box A1.10.Box A1.9: Profile of SanovoSanovo is the largest egg processor in DenmarkOwnership: Sanovo is part of the Thornico GroupSubsidiary: as part of the Thornico Group Sanovo has sister companies in Spain and Germany andadditional plant in Bulgaria and VenezuelaTurnover: €20 million in 2003 in DenmarkProfit: not availableEmployment: 50 staff in DenmarkMain markets: UK, followed by Japan, Russia, Denmark and the Far EastMain products: powder and liquid commodity products, some product differentiated by productionsystem57 Less than 20% of eggs used by Sanovo are sourced domestically.58 The production of powder increases storage lengths and allows eggs to be bought in bulk when the price is low.137

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