FrieslandCampina has said it intends to restructure its operations in Hungary, with the closure of its Debrecen plant and possible job losses.
The company said the factory was underutilised and would be closed by September this year, with production of some products being transferred to its Mateszalka factory, about 75km northeast of Debrecen, and logistics being transferred to its main distribution centre in Budapest. Production of other products is expected to be outsourced, and administrative functions are also expected to be transferred to the Budapest central office during 2014, according to the company.
Of a total of 675 employees in Hungary, the Debrecen plant employs 303 full-time equivalents, according to company spokesperson Ria van der Peet.
Factory sale talks
Meanwhile, the company said it had signed a letter of intent for the sale of the Debrecen facility with another dairy company, adding that if a final agreement is reached, the factory could remain in operation, supplying FrieslandCampina with dairy products under contract.
Therefore, it was not possible to specify how many jobs may be lost, if any, van der Peet told FoodNavigator.
Managing director of FrieslandCampina Hungary, Kostas Maggioros, said in a statement: “The aim of the proposed reorganisation is to construct a robust and competitive supply chain that will best support the future growth strategy and product portfolio in Hungary.
“We are optimistic that we will be able to conclude the sale of the factory and, in any case, we will do all we can to support our employees."
Employees were informed of the reorganisation last Friday, December 28. The company said it would “do its best to support affected employees to find a new job either within FrieslandCampina or outside the organisation.”
The move is part of a wider reorganization strategy to improve efficiency, reduce costs, and to solidify and grow its branded products, FrieslandCampina said, in light of the economic crisis.
Van der Peet added that if current talks were successful, it would take about six months to conclude a sale.
The announcement comes just weeks after the company said it intended to cut about 230 jobs at three of its German plants, equivalent to about 15% of its total workforce in the country.