French dairy major Lactalis plans to close a factory in Romania acquired through the 2016 acquisition of Covalact.

The site earmarked for closure is located in Miercurea Ciuc, sitting in Harghita County in eastern Transylvania.

Around 95 staff will lose their jobs at the milk processing plant.

Lactalis said it is planning to invest at its four remaining Romania sites in Oiejdea, Sfantu Gheorghe, Campulung Moldovensec and Tunari.

“This new stage in organising our activity is part of Lactalis Group’s long-term strategy to consolidate investments and develop its businesses in Romania,” Onur Barim, the general manager of Lactalis’ business in Romania, said.

“We have invested over €60m in the last five years in Romania and, for the current year, we have planned investments of over €13m. These investments will allow us to be more competitive on the market and further diversify our product portfolios, for the final benefit of Romanian consumers.”

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In 2020, Lactalis announced the closure of two plants in Romania. The sites, located in Floreni and Vatra Dornei, were part of a deal struck in 2008 for the Dorna Lactate company, marking the company’s entry to the country.

Lactalis acquired Covalact from US investment fund SigmaBleyzer, with reports at the time suggesting the deal was inked for around €40m ($42.8m today). Prior to that transaction, the company also snapped up Romanian dairy business Albalact.

Alongside Lactalis' international brands such as President, Galbani, Leerdammer and Parmalat, the company also markets the LaDorna, Covalact and Bardezzi lines in Romania.

In April, Lactalis announced a plan to shut a yogurt and desserts site in Australia.

Now Lactalis also plans to sell a warehouse in the vicinity of its factory in South Brisbane, located on Montague Road. The company’s CEO for Australia, Mal Carseldine, said the disposal was “driven by a strategic decision to sell-down property surplus to requirements”.

He added: “Our factory at 65 Montague Road continues to play an indispensable role in our operations. While I acknowledge this does create uncertainty for the small team working out of 108 Montague Road, operations will continue at the site as usual until we have clarity from a buyer on their intent and how that may align with our own ongoing operational plans.”

The same month, Lactalis revealed its results for 2023, noting a “weak” profit performance as the company faced pressure on volumes from private label.

Headquartered in Laval, Pays-de-la-Loire, Lactalis reported turnover rose 4.3% in 2023 to €29.5bn.

Chairman Emmanuel Besnier said consolidated net profit “remained weak”, coming in at €428m, albeit an increase of 11% from the prior 12 months. Profit stood at €384m in fiscal 2022, down 14% year-on-year.

Lactalis explained that “2023 was marked by a change in consumer purchasing behaviour, reflected in a fall in sales volumes and a specific appetite for private labels – to the detriment of national brands (especially in Europe)”.

However, the company said demand for its products “held up well thanks to their quality and affordable prices”.