Vion Food Group

Pigs

Big challenges await the new CEO of Vion

September 25, 2024 - Wouter Baan

The highest priority for Tjarda Klimp is to get meat giant Vion out of the red numbers when she takes over from the departing CEO Ronald Lotgerink next year. However, making Vion profitable again is not the only challenge awaiting Klimp.

It is quite remarkable that 52-year-old Klimp will succeed Lotgerink as CEO of Vion in January. As the current CFO, she has been responsible for the financial affairs of the meat processor for three years. And that's where the problem lies, as is now widely known. The annual figures for 2023 have not yet been presented, but were probably once again not good. Nevertheless, the Vion supervisory board apparently has enough confidence to promote her to the top position. This makes her the first female CEO of Vion, operating in a world dominated by men, which is a nice first for her.

Lotgerink's Departure
Lotgerink's impending departure did not come as a surprise. In the weeks leading up to his announced departure, there were already rumors of changes in the top of Vion. Lotgerink will complete this year and then presumably take it easy after a few hectic years. He claims to the Brabants Dagblad that Vion will be in a better position after his departure than when he took office.

Assessing Lotgerink's performance is somewhat difficult. In any case, it has not been a resounding success. The mitigating circumstances are that Vion is not an easy company, as evidenced by the often disappointing results in the past. In addition, he also had to lead Vion through difficult times. The outbreak of African swine fever in Germany four years ago still haunts the company to this day. This is also the reason why Vion is now leaving the German market. The COVID-19 pandemic also posed significant challenges, both in the market and on the shop floor.

Change of Mind
Especially in the last two years, the pressure on Lotgerink increased significantly. Earlier this year, he made the decision to leave Germany, which was certainly not an easy decision. That shows decisiveness. However, whether this was a well-thought-out plan remains to be seen. When we asked him last summer if leaving Germany was an option, he firmly stated that he did not want to divest the loss-making German activities. Later, he apparently changed his mind.

Tjarda Klimp and Ronald Lotgerink.

Whether the slimming strategy is the right choice will be revealed in the future. By leaving Germany, the company's revenue will decrease from around €5 billion to €3 billion over the next few years, as calculated by Lotgerink and Klimp. The proceeds from the sale of German locations will strengthen the weak balance sheet. This will make Vion more robust and also more transparent, and therefore likely easier to manage.

Restoring Stability
It is Klimp's task to quickly bring Vion back to more stable waters. Primarily in financial terms, but also in other areas. The company has not excelled in communication in recent years. The Vion pig price sometimes makes deviating movements that have sometimes caused discontent in the sector. In addition, the reorganization also creates tensions internally in the workplace, although that is of course not entirely surprising. Moreover, due to the rapid decline of the pig herd in the Netherlands, it will also be challenging to keep the slaughter lines well stocked.

However, the originally Groningen-born daughter of a farmer, Klimp, appears down-to-earth and sensible and has the necessary experience in her backpack to lead Vion in the coming years. She has already led the restructuring plan and knows all the ins and outs. She does not need to be trained, which saves valuable time. The female touch may also benefit the gray Vion of recent years.

Wouter Baan

Wouter Baan is the editor-in-chief of Farmerbusiness and a market specialist in dairy, pork, and meat at DCA Market Intelligence. He also tracks developments within the agribusiness sector and conducts interviews with CEOs and policymakers.