Dutch dairy producer FrieslandCampina has announced plans to close one of its domestic butter factories and rebuild another.

The cooperative is set to shut its site in the city of ‘s-Hertogenbosch by the middle of 2025.

However, the company plans to reconstruct its butter facility in the town of Lochem, a project it said will take around two years.

The closure of the ‘s-Hertogenbosch facility will result in the loss of almost 90 jobs, while the new factory will create 27 posts. The company claims the new plant in Lochem will “significantly reduce CO2 emissions”.

FrieslandCampina said the decision is the result of the foodservice market’s growing demand for more cream, which results in less cream to make butter. The trends have led to a “structural overcapacity in butter production”, it added.

The company will merge all its butter production at the new Lochem facility. “Combining the butter oil and powder production with the butter production in Lochem will lead to more efficient production,” FrieslandCampina said in a statement.

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A FrieslandCampina spokesperson added: “Due to the strong growth of more profitable cream products for the foodservice market in our production operations in Lummen and Nuenen, we also face overcapacity and underutilisation of our butter production network. Underutilisation leads to higher costs. In addition, we run into limitations in terms of flexibility, efficiency and sustainable production.

“Moreover, cost and competitive considerations play an important role. With the planned closure of the ‘s-Hertogenbosch site, we will reduce butter capacity, and expand the butter production in Lochem with production capacity from ‘s-Hertogenbosch. And investments will be made in efficiency measures and quality improvements in Lochem.”

In the statement, Roel van Neerbos, the president of FrieslandCampina’s food and beverage division, added: “We realise that this intended decision marks the end of our decades-long presence in ‘s-Hertogenbosch in a couple of years and that this farewell will be an emotional moment for many employees. Of course, we will support them in finding new jobs within or outside FrieslandCampina.”

FrieslandCampina CEO Hein Schumacher is stepping down this year and moving to the role of chief executive at Unilever. He has led FrieslandCampina since 2018 after serving for three years as CFO. Schumacher will leave his position in April. The company has stated that it has “initiated an accelerated process to select his successor”.