Dairy firm Friesland Campina has announced what it describes as a ‘comprehensive reorientation’ of its German operations, which will see the closure of a plant in Gütersloh.
As part of the move, Friesland Campina will invest a ‘considerable’ amount in its core brands, including Landliebe, Tuffi and Frico, as well as bundle together its commercial activities in the Düsseldorf area and implement additional measures to improve profitability, the company said.
These measures will include the closure of the facility in Gütersloh, which will affect 231 employees, but should result in restoring the company’s profitability within three years, it said.
Fragmented
“The German market for dairy products is fragmented and characterised by fierce competition due to overcapacities,” Jan Kruise, managing director of FrieslandCampina Germany commented. “We are convinced we will be able to master these challenges by focusing on our strong brands and through strictly consumer-oriented management of our product portfolio.
“We are the only company with a substantial presence in all dairy categories and channels, and we will benefit from this competitive advantage by proving ourselves a preferred partner in the market in accordance with our strategy. In order to achieve our ambitious goals we will invest in our business and we will not shy away from difficult decisions that will open up the path to a successful future for the long term. We are here to stay.”
Gütersloh Closure
On the closure of the Gütersloh site, Friesland Campina said that this was as a ‘consequence of overcapacities in the highly fragmented German market’, and that the facility specialised in private label desserts, which has been a loss-making aspect of the company’s business. This category will now be discontinued, and other product lines will be transferred to the plants in Cologne, Heilbronn and Maasdam in the Netherlands.
“This was a tough decision to make’, said Kruise, “but previous attempts to fix the problems have failed and after careful consideration of alternative solutions the continued loss-making situation, unfortunately, has left us no other choice.”
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
