Germany-headquartered food group Dr. Oetker plans to close its only manufacturing facility in the Czech Republic with the loss of 114 jobs.
The family-owned business will, however, continue to serve the Czech market and will retain around 74 employees in administrative roles when the plant in the city of Kladno closes, slated for the middle of this year.
Dr. Oetker produces branded baking mixes, and pudding and desserts powders at the site, which the company acquired in 1997.
Explaining the rationale for the closure, Dr. Oetker said in a statement the factory “does not offer any opportunities for expansion” and hence is no longer suitable for “modern production”.
The business will continue to serve the Czech retail and foodservice market from other production facilities outside the country, mainly in Hungary, a Dr. Oetker spokesperson confirmed with Just Food.
Bielefeld-based Dr. Oetker said: “The situation on the retail market in which Dr. Oetker operates has changed significantly in recent years due to forced cost increases. Food manufacturers have faced increasing economic pressure and competition in recent years due to rising energy and raw material prices.
“To succeed in this environment, Dr. Oetker must constantly modernise its technology and optimise its organisation. Despite the high-quality work of all employees, this is not possible in the production in Kladno due to the limitation of the available production space.”
Employees affected by the Kladno closure will receive severance packages “beyond legal requirements” and will be provided with career assistance to find alternative job opportunities, the company said.
In 2021, amid Oetker family differences over strategy and the management of a myriad of subsidiaries, the business split into two.
Dr. Oetker, the group’s main food business, plus bakery unit Coppenrath & Wiese, drinks company Radeberger Gruppe and beverage delivery unit Flaschenpost, along with assets in transport and hotels, were housed in one group owned by the five heirs from Rudolf-August Oetker’s first and second marriages. He was the founder of Dr. Oetker.
In its 2023 financial year, Dr. Oetker and Coppenrath & Wiese generated sales of €4.2bn ($4.3bn).
Aside from baked goods and baking ingredients, the food business produces frozen pizza, snacks, chilled desserts and puddings, cakes and muesli.
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