FrieslandCampina has announced plans to streamline its Romanian cheese business in an effort to offset the impact of declining dairy consumption in the country.
FrieslandCampina Romania announced late last week that its cheese production plant in Carei and the cheese packaging unit at its Targu Mures facility will close. Operations will be consolidated into those at its plant in Baciu.
Dairy product consumption in Romanian has decreased by more than 6% each year.
This, according to Netherlands-based FrieslandCampina, has resulted in all of its facilities operating under capacity.
The soon-to-close Carei plant is currently operating at less than 30% of its capacity, the company added.
Speaking with DairyReporter.com, Jan-Willem ter Avest, spokesman, FrieslandCampina, said that the closures will enable the business to adjust to “to the current market situation” and “ensure a sustainable long-term presence on the local market.”
“Consumption is at a low level in comparison with the European average," he said.
"...Romania is a competitive market, currently under tough circumstances and with a lack of consumer spending.”
ter Avest declined to directly discuss the performance of FrieslandCampina's Romanian business, but said that in the current market efficiency is key.
“In order to be competitive, operating costs have to be brought down and at the same time we upgrade our technology. Thus, we are constantly looking at optimizing our business," he said.
FrieslandCampina Romania expects to complete the consolidation process in January 2015, with the loss of around 130 jobs at its Carei plant.
Savings realized as a result of the closures will be ploughed back into product innovation, with a particular focus on its Napolact brand.
"Napolact is our most important brand in the Romanian market," said ter Avest.
"It shows, even in this difficult market, continuous growth. It is a premium brand with quality products and special recipes. We believe that by maintaining the quality of Napolact its loyal consumer base will continue to grow," he added.
Earlier this month, it was reported that FrieslandCampina had invested more than €100,000 (US$135,000) to refresh the Napolact range, which includes milk, yogurt, cheese and cream products.