FrieslandCampina plans to cuts its German workforce by more than 15% in an effort to increase its competitiveness in the country's supermarket-dominated “difficult” dairy market.
The Netherlands-based co-operative intends to eliminate a total of 230 jobs at its Cologne, Heilbronn and Gütersloh dairy processing facilities – around 15% of it’s 1,500-strong German workforce.
The firm’s Schefflenz plant will be unaffected by the cuts.
FrieslandCampina spokesperson Jan-Willem ter Avest told DairyReporter.com that despite the workforce cuts, none of its four German plants will be closed.
He added that production levels at the affected plants, which manufacture yogurt, dairy desserts and fresh milk, will not be negatively impacted.
Alongside the cuts, FrieslandCampina intends to invest “tens of millions” to update plant technology, improve infrastructure, and strengthen the market position of its core ‘Landliebe’ dairy brand.
“We want to increase the efficiency of our plants in Germany,” said ter Avest. “We want to implement changes to optimise production at our plants.”
“We want to keep our market share and strengthen our position in this market. We just want to produce dairy products for the German market in an efficient manner.”
According to ter Avest, FrieslandCampina is taking these measures to maintain its share of the “intensely competitive” German dairy market.
In recent years, local competition and declining consumption has put the German dairy market under pressure. This has been further intensified by supermarket focus on lower fresh milk prices.
“It is a different market than the Netherlands. It is more consolidated and the supermarkets are very dominant. It is a difficult market to operate in,” said ter Avest.
“We still have our market share and we want to keep it. That’s why we are doing this.”
Through the investment, the firm’s Cologne, Gütersloh and Heilbronn plants will be modernised, while production and administration processes are to be optimised with a view to cutting costs.
The company declined, however, to provide specific details of the planned investments.
“We aren’t giving exact figures at the moment, but it will be tens of millions of euros. It will be spent on making changes to production. But we are still looking into the specifics of it now,” said ter Avest.
“We are starting discussions with the unions. From there we will have a clearer view of the future,” he added.