After investigating its production capacities and synergies, FrieslandCampina has decided to close six sites in the Netherlands, Germany, and Belgium, and cut 942 operational jobs and create 318 new ones.
Job loss total
On balance, this means 624 net jobs cuts over the next two years out of a worldwide workforce of 20,500. These jobs cuts are in addition to the 500 planned office-based job losses announced when Friesland and Campina merged late last year.
Restructuring should help reverse the downward trend in profitability felt in 2009. Operating profit across the group fell 8 per cent to €110m in the first six months of the year, as world dairy demand fell causing a reduction basic product prices.
“The aim of the proposed reorganisation of production is to reduce costs further by means of an increase in scale and efficiency improvements,” said Cees ’t Hart, CEO of FrieslandCampina.
But improved profitability is only expected to come clear in the accounts in 2-5 years as FrieslandCampina faces high social charges and investment costs in the short-term.
Plan details
Under the new plans one of the biggest sites to close will be the yoghurt and dessert factory in Elsterwerda, Germany, where 300 jobs will be lost. Production will be moved by mid-2011 to the German towns of Gutersloh, Heilbronn and Cologne, with 75 new jobs planned for Gutersloh and a further 17 at Heilbronn.
At around the same time another major factory will close in Kalkar, Germany, at the cost of 173 jobs. The long-life milk (UHT) production at the plant will be divided between Cologne for the German market; Aalter, for the Belgium market, for the Dutch market; and Debrecen for the Hungarian market.
As a result, eight new jobs will be created in Cologne, seven in Debrecen, and 71 in Aalter, where the production of chocomel and yoghurt drinks will also be transferred.
A further 26 jobs will be created in Aalter from the closure of the Packaging-South department in Leeuwarden, the Netherlands, where coffee creamer is packaged. Some production will also be transferred to Bornem, Belgium, resulting in the creation of six new jobs. The closure of the unit at the Leeuwarden site is planned for the second quarter of 2011 and will result in the loss of 73 out of 850 jobs.
In the cheese segment of the FrieslandCampina business two production and packaging plants will be closed in Drachten and Tilburg in the Netherlands.
The cheese packing plant in Drachten will be shut at the end of 2010, with the loss of 60 jobs, and at the same time, the packing operation in Tilburg will also be closed, resulting in 104 job loses. Packaging operations will remain in the Netherlands, with 47 jobs being created in Leerdam, and 45 in Wolvega.
After the packing unit at Tilburg closes at the end of 2010, the cheese production and processing department will close its doors in the first quarter of 2011. This will mean 83 job losses. Production will be relocated to various sites in a reorganisation move that will result in two new jobs in Bedum, the Netherlands.
Tilburg is also home to the 31-strong development department of FrieslandCampina cheese, which will be moved to Wageningen with no jobs being lost as a result.
Cheese production will also come to an end at the cheese production site in Dronrijp, the Netherlands, in the second quarter of 2011, with the loss of 86 jobs. Production will be relocated to various sites, and a small part will be outsourced. Whey is also produced at the site, and the location of that operation may stay in Dronrijp, depending on the results of a study being conducted by the ingredients business group.
Finally, plans are afoot to close the production site for butter oil and cream products in Klerken, Belgium, in mid-2011, with the loss of 63 jobs. Production will be moved to the Noordwijk and Lochem in the Netherlands, with the creation of 15 and two new jobs respectively.