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December 16, 2020

FrieslandCampina restructures business model with more jobs on line

FrieslandCampina is revamping its organisational structure with the creation of two business units under a previously announced strategy to reduce costs.

By Dean Best

FrieslandCampina is revamping its organisational structure with the creation of two business units to house the Dutch cooperative’s food and beverage and dairy units as part of a previously announced strategy to reduce costs.

Next year, the dairy major said it will form FrieslandCampina Trading to encompass the current Dairy Essentials division to focus on “profitable trade in bulk dairy products” such as butter, cheese and milk powder. Its Zijerveld Kaas cheese operation in Bodegraven, which falls under the Dairy Essentials unit, will be merged with the company’s other cheese activities in the Consumer Dairy business group. 

And it is also creating FrieslandCampina Professional, which will be responsible for the co-op’s “high-value” B2B foodservice operations, and will incorporate the food and beverage activities of the current FrieslandCampina Ingredients division.

A strategic partner will actively be sought for the animal food business of FrieslandCampina Ingredients.

The latest plans come at a cost, with 55 redundancies on the cards to add to the hundreds of job cuts already announced as part of FrieslandCampina’s drive to reduce over capacity and costs, a strategy initiative revealed in November and dubbed ‘Our Purpose, Our Plan’.   “The purpose of the transformation is to create a FrieslandCampina capable of operating successfully even in extremely challenging market conditions – such as we are seeing at present with the coronavirus crisis – and able to pay its member dairy farmers a competitive rate for their milk,” the company said in a statement.

This week, FrieslandCampina announced it was selling its milk powder operations at the co-op’s facility in Aalter, Belgium, to family-run Dutch dairy company Royal A-ware but will retain its consumer dairy products facility on the same site supplying the retail sector.  

Earlier this month, the co-op announced it would close its Yoko cheese facility in the Belgium town of Genk by the end of next year, with 211 jobs set to go.

And the company also plans to close its Dutch milk powder facility in Dronrijp by April 2022, and discontinue manufacturing of whey and milk powders at Gerkesklooster, although that site will still produce other dairy products such as cheese. Around 57 jobs are set to be lost.

In November, the co-op said 195 positions would go at a couple of plants in Germany in Heilbronn and Cologne as it scales back production of “unprofitable products”, although the sites will remain operational.  

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