Drawing 2 Salami chain

Source: Own study
2.2. Farmers and pigs production

Pig production in Poland is very widely distributed. There are over 1 million pig breeders in Poland who keep relatively small herds. This is almost the same number of farms breeding pigs as in entire EU-15. Only 10% of pig production farms have herds exceeding 50 heads. Over 85% of pigs are slaughtered and processed in specialized plants, and rest is slaughtered in the farms for farm households needs. Pig production is growing quickly due to changes in market structures and price relations. Large scale producers can receive much higher prices than smaller ones from meat processing plants for delivering large number of pigs in the highest class of EUROP classification.
Pork producers should have a contract with processing companies. The producers who do not have contract with the companies receive 10% lower price for pork deliveries. It is estimated that the difference of costs between small and large producers is about 15%. There are fifty meat processing companies which are interested in contracts with larger producers, delivering products of high quality in large amounts. For the low producers the alternative is to get bigger or to establish producer groups with other similar producers. For low producers it is also difficult to fulfill requirements established by the European Union. In the smallest farms pork productions do not reach the market and is devoted for consumption in the household.
The contracts between farmers and meat processing companies can cover one or more years. Contracts usually include minimum of delivery/procurement per year, monthly or quarterly amount of deliveries, minimum of pigs per one delivery and payment periods for delivered pigs. Prices differ according to the quality of meat specified in EUROPE classification. Multi-year contracts include additional premiums for delivery on time.10
Sokolow S.A. has off-take contracts for supplies of livestock. It is long-term collaboration of all taking part in the production of fattening pigs, i.e.: producers of breeding gilts and boars, producers of piglets, producers of fattening pigs. Thanks that Sokołów S.A. influence on quality of pig’s meat and salami. Company ensures receiving contractual pigs by using special transport.

2.3. Slaughtering

The whole infrastructure is not only the technological line, but as well a livestock warehouse for pigs, separate sections for intestine processing, cold storages for shock freezing of carcasses, meat-cutting, the hall for meat-handling and packaging, a carwash for trucks, a mechanical and chemical preliminary treatment facility for technological waste.
The technology of meat production is of the world’s highest quality of sanitary and hygienic level. To make this undertaking real, company chose solutions ensuring the quality with possibility of cost minimization like animal gas stunning resulting in a better end-quality of meat, condensation scalding in a scalding tunnel, a singeing furnace, slaughtering waste pressure removal system and shack freezing tunnel operating at -25°C.
2.4. Processing

Salami is made from a mixture of chopped pork, wine, salt, and various herbs and spices. The mixtures include additional ingredients to assist in fermenting: nonfat dry milk, dextrose, lactic acid starter culture (bacteria), ascorbic acid, sodium nitrite, and sodium nitrate. The raw meat mixture is usually allowed to ferment for a day and then the mixture is either stuffed in edible natural or non-edible artificial casings or hung to cure. The casings are often treated with an edible mold (Penicillium) culture as well. Mold imparts flavor and prevents spoilage during the curing process. 11
2.5. Food safety

In order to win in the tough market competition, the producer must be able to affect the material quality even before he buys it. Hence, SOKOŁÓW S.A. has launched and is persistent with a modern, unique system of material quality improved, hallmarked “Into the Future Together”. It is addressed to producers already connected with the Company by off-take contracts for supplies of livestock, and to all others, who apply modern practices and are interested in becoming engaged in long-term contracts.
The program has a comprehensive scope, and it involves long-term collaboration of all entities taking part in the production of fattening pigs, i.e.: producers of breeding gilts and boars, producers of piglets, producers of fattening pigs, fodder producers, companies which improve environmental conditions, banks and branch establishments of "SOKOŁÓW" S.A. The program is continued thanks to the production of high-quality breeding gilts in "Agro-Sokołów 2", which are distributed among producers. Its aim is to establish for the swine producers the optimum economic and breeding conditions for production by:
* ensuring high quality breeding gilts and boars, top quality fodder and comprehensive advisory services in respect of feeding and options for improvement of environmental conditions;
* the possibility for modernization and modern equipment of production facilities, as well as securing appropriate veterinary prophylactics, all on preferential terms;
* the possibility to use preferential bank credit for the financing of gilts and boars, piglets and fodder.
The program ensures sales demand and development opportunities to the breeders, a sales market to the producers of devices and fodder, and a high quality material to the Company. The final outcomes are the products of Sokołów on the shop shelves, combining top quality and the best price.12