Milcobel has “parted ways” with CEO Nils van Dam, citing a “difference in vision” with the Belgium-based dairy cooperative’s board.
While the co-op said the separation with van Dam, who became CEO in 2020, was by “mutual” consent, Milcobel also referred to the “challenging” business environment, characterised in part by a peak in milk production.
“Volatile markets” and “stricter sustainability requirements” in Belgium were also noted in a statement from the Kallo-based business, which sources milk from some 2,000 family-owned local dairy farmers.
Despite what Milcobel said were “strong efforts to reposition itself in a competitive dairy landscape” and to push the value-added agenda, it is now seeking a new CEO. For the time being, a “limited management team” will run the business, it added.
President Betty Eeckhaut said: “Under the leadership of Nils van Dam, Milcobel made a necessary catch-up. However, the evaluation of the realised trajectory and the preparation of the next steps revealed a clear difference in vision between [the] board of directors and CEO.
“In mutual consultation, it was therefore decided to end the cooperation.”
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Van Dam was credited with introducing the so-called Phoenix strategy to boost Milcobel’s value-added ambitions. However, while Eeckhaut thanked the departed CEO for making the co-op “competitive again”, he suggested the board was less than satisfied.
“We may speak of a real transformation, even if today it does not always deliver the results we aspire to. Paying an above-average milk price to our member-cooperants remains the objective. The foundations for this have been laid, now results must be achieved,” Eeckhaut added.
Milcobel registered a turnover of €1.36bn ($1.47bn) in 2022, up from €1.14bn in the previous 12 months, according to its annual report for that year.
Profits, however, diminished. The before-tax figure halved to €5.04m, while net earnings dropped to €4.3m from €10.6m.
The co-op supplies supermarket chains and local retailers and also provides ingredients to manufacturers, as well as serving private-label customers.
Its product range features cheese, including the Brugge and Nazareth Kaas brands, along with butter, milk powders, cream and whey. Milcobel also serves up ice cream to private-label accounts in Europe through its Ysco division.
In 2020, Milcobel closed a milk-production plant in Schoten, Belgium, leaving the business with seven sites.
Milcobel suggested 2023 was a taxing year marked by “the influence of sharply falling dairy markets, resulting in a lower milk price for member-cooperants”.
It is now looking at new opportunities such as a partnership with Arla Foods’ ingredients division to supply whey proteins for use in infant-formula and pharmaceutical applications, which kicked off this year. And Milcobel plans to invest in “highly valorising products”.
Eeckhaut added: “In order to be successful, we need to increase our commercial clout, among other things. We expect a new CEO to take the lead in this and inspire the teams.”