DCH International A/S – Premium Porc Group

Farmers without borders

As a business built on the back of several years of combined industry experience, DCH International A/S represents a leading Danish holding company that develops and manages full-line pig farms within Romania

Operating from its headquarters in the town of Fredericia within the eastern region of the Jutland peninsula in Denmark, DCH International A/S acts as a holding company for nine subsidiary businesses that are focused on delivering pig production to clients throughout the Romanian market. The roots of the business can be traced back as far as 2000, when a group of 12 Danish farmers decided that the unique knowledge of high-quality pig production within the country lacked both the political backing and profitability to grow a strong market for fresh pork products.

The decision was subsequently taken to find a new market that could offer better terms and government support to allow for the continued growth of a strong pig production business. This led the group of farmers to enter into the Canadian market, which had amassed a vast surplus of grain during the early 2000s. Industry planners within the region intended to convert this excess grain into protein stock, which would be achieved in part through increased hog production. While initial moves into Canada showed significant signs of potential, the price of pork dropped dramatically during the following five years due to events within the market that were beyond the company’s control.

During 2005 it was decided that although the business model of DHC International within Canada was very successful, the market was working against the business and that a new region might offer more fertile grounds for development. Over the following 12 months, representatives of the business toured Eastern Europe in search of a suitable new area of opportunity, with Romania finally being selected by the company’s management for its rich market opportunities and high demand for pork products.

“We eventually visited Romania around six or seven times and found that it was a country that was well on the way to joining the EU and which had a significant history of large pork consumption. We also discovered that the region had a major deficit in pig production and several Sovietera farming complexes that we could upgrade into first-class modern production facilities,” reveals DCH International CEO, Lars V. Drescher. “The company’s management team and investors each put some capital into the business, while I signed on to take the role of CEO as we established ourselves within the Romanian market. During the subsequent years, we have grown from having no presence within the country to more than 400,000 animals produced per year at present.”

DCH International presently incorporates nine subsidiary businesses, comprised of Premium Porc SRL, Premium Porc Negreni SRL, Consinterfin SRL and Degaro SRL, which focus on pig production; Premium Porc Feed SRL in the field of feed production; and Agro Investment Moldova that focuses on crop production, land sale/purchasing, machinery and workshop equipment and construction. These businesses allow DCH International to have a firm hand in controlling both the quality and efficiency of its production operations by producing crops and processing animal feed at its own mills.

Three focus areas

In 2015, the decision was taken to sell the company’s Canadian operations to further allow DCH International to wholly focus on its Romanian business, where its management team perceives strong future growth potential. “We are eager to continue to expand the business and in recent months we have developed an expansion strategy that will enable DCH International to grow by around 50 per cent, by adding almost 200,000 pigs per year to the company’s overall production. We are currently doing extremely well with our current hog output and are farming circa 2000 hectares of land,” Lars explains.

“We maintain three main competences across the business, which begin with our ability to find former state-owned farms within Romania and transform them into leading pig production facilities that place top priority on quality and animal welfare,” he adds. “We also employ expert management and expertise to rear Danish pig breeds that are genetically lean and can deliver large quantities to product per animal. In addition to continued investment into the development of the company’s farms and pig production, we also place a high priority on human resources (HR) and in empowering our people across the business. With these three areas of focus we feel that we have a strong base from which to grow.”

Plans for growth

Indeed, DCH International has established several key strengths that have identified the company as a highefficiency pig manufacturer within the western world. The business operates according to a refined business model that is built upon Danish know-how within the field of professional pig production, innovative technology and strategic investments. Throughout the history of the company its business model has been thoroughly tested, while the DCH International management team operates with a strong background within the pig rearing industry and incorporates core competences in establishing and overseeing pig farms within different markets. The strategic goal of the business is to achieve continuous and solid growth that exceeds industry averages, which it will achieve through implementing several key business strands such as:

• Danish know-how and technology
• Well-proven management systems
• Well-educated local staff
• High efficiency
• Large-scale operations
• Efficient returns per unit produced
• A balanced ratio between pig and cereal prices

As the business continues to grow DCH International will work with its clients within the Romanian market to deliver high quality Danish pork products. Since its inception, the company has continued to expand both its production and logistics solutions according to a proven business model, which will enable the business to further take advantage of development opportunities within its target markets throughout 2017 and beyond. “We supply our customers with live pigs and have an established fleet of vehicles that transport the animals across the market. We currently have a fleet of around 17 trucks that delivers pigs, feed and grain products and this number continues to grow,” Lars concludes. “Romania presently has a 40 per cent deficit in pork production, meaning that there is currently major undersupply within the region. We are committed to increasing pig production while further improving the operating margins of our business and generating solid cash flows to sustain ambitious long-term growth plans. This growth will be achieved through both organic expansions as well as future acquisitions as the opportunity arises.”