Daloon rolling forward again

Things are looking up again for the spring roll giant Daloon from the Danish island of Funen. Over a four-year period, the company has carried out a successful turnaround and the recently published annual accounts show an improvement in the company’s net income of DKK 47 million compared with 2005.

 

The bottom line is back in the black and, with the company’s centralised production and the introduction of groundbreaking technology, Daloon is now well equipped for further growth and success over the coming years.

 

Press release

  

March 2007

 

Daloon rolling forward again

 

Things are looking up again for the spring roll giant Daloon from the Danish island of Funen. Over a four-year period, the company has completed a successful turnaround and the recently published annual accounts show an improvement in the company’s net income of DKK 47 million compared with 2005. The bottom line is back in the black and, with the company’s centralised production and the introduction of groundbreaking technology, Daloon is well equipped for further growth and success over the coming years.

 

Daloon has recorded growth and posted impressive annual accounts virtually every year since the company’s founding in 1960. So, when the company recorded a major deficit for the first time in many years as a result of rising production costs and a fall in turnover, Daloon’s management reacted swiftly.  The management team immediately implemented a series of short-term optimisation initiatives and also decided to implement a comprehensive turnaround for the company.

 

Today, some four years later, Daloon publishes its accounts for 2006. These accounts indicate a marked improvement in the company’s net income. Behind the successful turnaround is Managing Director Hemming Van, who has once again got the illustrious family business back on the right course.

 

“In 2003, we decided to implement an ambitious turnaround plan in order to restore Daloon to profitability. It has been a long and tough process and there have been many challenges along the way, and although we have not yet reached our goal we are certain we are heading in the right direction,” says Hemming Van, who took over as Managing Director of Daloon in 1989.

 

Extensive centralisation and investment

As part of the comprehensive process, Daloon has concentrated all Scandinavian production in Nyborg over the past four years. This has resulted in the disposal of the company’s factories in Sweden and in Rudkøbing on Langeland. Pastry-ball production has also been disposed of as part of the decision to focus on the company’s core products, i.e. spring rolls and other snack products. In step with the centralisation process, Daloon has optimised its production processes, introduced round-the-clock production and invested in groundbreaking new technology in the form of a modern and fully automated packaging facility.

 

“Packaging was previously carried out in the old-fashioned manual way, which was both resource-intensive and physically demanding for the employees. We therefore decided to invest DKK 50 million in automating the packaging facility as part of the major reorganisation of production in Nyborg,” explains Hemming Van.

 

The investment is bearing fruit

The introduction of the new technology did not, however, proceed entirely according to plan for Daloon. The facility was incomplete on handover and major changes and adjustments had to be made. There was also the major challenge of training the employees to use the new advanced high-tech system and of familiarising them with the new three-shift round-the-clock production process. The spirit of collaboration suffered as a result of the frustrations over the new technology and the many difficulties that were encountered also hampered the prioritisation of problem-solving and had a serious impact on production. The difficulties associated with the introduction of the new, high-tech facilities were therefore the direct cause of Daloon’s considerable operating deficit in 2005.

 

To overcome the problems, Daloon therefore initiated a comprehensive internal process, where the level of focus and determination within the production management team was a major factor in raising the level of knowledge amongst the company’s employees to a high level. Changes were also made within the production management team and an efficiency drive was instigated in collaboration with the Confederation of Danish Industries. Tough decisions were also made concerning priorities relating to problem-solving.

 

“It has been a far-reaching process, which has required considerable effort, not least on the part of our employees who have shown perseverance and the ability to work their way out of the problems,” says Hemming Van.

 

Today, the many initiatives that have been implemented have stabilised production and dramatically improved Daloon’s profitability.

 

“There is no doubt that we have made an entirely necessary and sensible investment in both new technology and in the centralisation and internal optimisation of the work processes and we are now beginning to see the results of this investment,” says Hemming Van, who can be very pleased with the improvement in net income from the company’s primary operation/EBIT of over DKK 47 million in 2006.

 

Successful turnaround

Daloon has turned the deficit relating to the company’s primary operation in the previous annual accounts of DKK 37 million into a profit of DKK 10.7 million in 2006. Despite the internal challenges it has faced, Daloon has been able to retain its German and Scandinavian customers. The company can also point to excellent growth in the UK, primarily within the extremely competitive retail sector. Following the successful turnaround, Daloon will follow the successful recipe over the coming years and continue its strong focus on income through ongoing improvements to the company’s production processes.

 

“We have not yet reached our goal and, in the Danish part of the business, further major changes will have to be made before it can become as profitable as it should be,” says Hemming Van.

 

In order to optimise production further, Daloon is therefore in full swing with the introduction of a team organisation and flow within production. In terms of products, Daloon will continue to focus on spring rolls and snack products, but the company will also add to its range of inhouse-produced products with commodities, primarily from Europe and the Far East.

 

“It is our very clear aim that, as early as 2008, Daloon will once again be a leader within the profitable European food sector. Following the successful turnaround, we are now geared and ready to take up the challenge and we therefore anticipate further growth and success over the coming years,” concludes Hemming Van. 

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Key figures for Daloon A/S

 

DKK million 2006, 2005, 2004, 2003

 

Key figures

 

Net turnover 412.4  423.0  472.9  515.0

 

Net income before tax (EBIT) 10.7  -36.9  -6.4  -28.2

 

Net income after tax 5.5  -32.8  -10.5  -23.8

 

Equity 166.1  158.9  189.1  200.5

 

Number of employees 337  387  406  472