The question is whether Vion management was granted a long holiday this summer. The meat company has various headache files on the table that require a lot of attention at both a strategic and operational level. All these vicissitudes are a breeding ground for noise and rumors.
It is clear that Vion faces a tangle of problems and challenges. Together with other major pig slaughterers in Europe, they are the victims of the trade troubles between Beijing and Brussels. The main location in Boxtel was opened a few weeks ago lost recognition from the NVWA to be allowed to export to third markets such as China, although this has recently been resolved, Vion said. About 90.000 pigs are slaughtered every week at the main site. Based on €20 per slaughtered fattening pig, this issue has already cost a lot of money.
Could this perhaps have been the reason why Vion was the driving force behind the recent price pressure on the pig market? In any case, they were the first to come up with a reduction last week, while other quotes remained stable afterwards. It resulted in a flood of criticism, but the reduction was not reversed last Monday.
Financial position
In the meantime, there are more and more questions in the sector about Vion's financial position. In other years, Vion usually presented its annual figures in March. Last year this was postponed to July and this year the figures will not be available until September, the spokesperson said. The postponed publication is said to be partly due to the settlement of the announced departure from Germany. In 2022, due to the problems in Germany, a one-off charge of €63,5 million had to be taken and the loss increased to more than €100 million. This was done under the guise of "better to take the pain than to muddle through", CEO Ronald Lotgerink said at the time.
When we asked him last summer whether leaving Germany was an option, he firmly replied that he did not want to completely sell off the loss-making German activities. Since June we have known that Vion certainly wants to close its doors in Germany and has its contents for sale. Various European slaughterhouses have reportedly already registered as buyers and there is probably also interest from private equity parties.
Whether Vion can win the top prize for the eleven German locations remains to be seen. But in any case, the benefits are more than welcome. They are probably not happy with the annual figures for 2023 in Boxtel and owner ZLTO. After all, the results of other Dutch slaughterers have all deteriorated in the past year and that is not a good omen. Solvency already took a serious hit in 2022 when it fell by 9 percentage points to 30,8%. Although considerably lower, this was not yet critical. A new loss worsens this number further.
Rumors about ZLTO's importance
ZLTO does not seem to have the financial resources to help. Within the ranks of ZLTO, the question now appears to be whether they are still the right owner of Vion, or whether - or so it sounds in the corridors - a buyer should be sought. These may be wild rumors, but this discussion is not completely illogical. In 2016, financier ABN Amro already approached various market parties - including Van Drie Group - to invest in Vion when the company needed money and could not turn to ZLTO for it. Viewed from a distance, the strategic importance of the Vion shares for ZLTO is certainly not a must and it has not yielded financial gain for the organization in recent years due to the lack of dividends.
We will find out more in September, when Vion's management opens the books and unfolds its plans. Just as the financial status of our country is announced on Budget Day that month, it is also high time to know how Vion is flying the flag.