In order to meet its growth objectives and improve efficiency within Europe, where the company says the market is under pressure, FrieslandCampina has announced that it intends to restructure its Dutch production and distribution of fresh dairy products such as milk, yoghurts and desserts.
The company will reduce the number of products and packaging types and will optimise the capacity utilisation rate of its plants by concentrating production capacity. As a result, the locations in Eindhoven and Woerden will be closed, which will lead to the loss of 174 jobs on balance.
At the same time, FrieslandCampina said that it will strengthen its brand positions by stepping the pace of innovation.
The company noted that, in line with its route2020 strategy, it has invested about €600 million over the past three years to expand its production capacity in the Netherlands – particularly in nutrition for children and ingredients. This has led to an increase of more than 350 jobs since 2011.
“We’re ahead of schedule in achieving our route2020 strategy, thanks to the favourable developments in Asia and the sales of ingredients for the food industry,” said Cees ‘t Hart, CEO of Royal FrieslandCampina. “We are investing heavily in this area. However, margins on several branded products are under pressure in a number of European countries due to lagging consumer spending. Improving efficiency and stepping up the pace of innovation for branded products are therefore key to our approach in Europe. We already initiated this process in Germany and Hungary earlier this year.”
The production of fresh dairy at the FrieslandCampina plant in Eindhoven, which employs 142 people, will be shifted to the FrieslandCampina plants in Rotterdam and Maasdam in mid-2015.
Meanwhile, the fresh dairy distribution activities will be transferred from Woerden (58 people) to Maasdam in mid-2015. Fifteen production jobs and 18 distribution jobs will be lost in Maasdam in the course of 2015. Eight jobs will be lost in Limmen and Drachten, and five jobs in Rotterdam. At the same time, 72 jobs will be created at the distribution centre newly to be built in Maasdam.
“We want to lower costs and at the same time invest in our brands for our home market in Europe,” said Bas van den Berg, managing director of FrieslandCampina Branded Netherlands/Belgium. “Unfortunately, this plan has consequences for a number of our employees. We see it as our responsibility to help them find new jobs within or outside FrieslandCampina.”
In response to changing consumer needs, FrieslandCampina said that it will invest more in consumer brands by means of innovation, new production technologies, an automated distribution centre and innovative packaging.
