Italian dairy giant Parmalat has announced plans to close three plants in the country in an effort to improve its efficiency and compete with low-priced private label milk.
The firm, which is owned and controlled by the Lactalis Group, confirmed plans to close its Genoa, Villaguardia and Cliavegna-based facilities, which manufacture and package fresh milk, cheese and butter.
Around 90 jobs at the three plants will be lost if the closures are completed.
Parmalat is in talks with the Italian food workers union, Unione Italiana dei Lavori Agroalimentari (UILA ULI), about the possible re-employment of the workers at the facilities.
Spokesman for the firm, Fabio Caporizzi, told DairyReporter.com that on the back of closures, the firm intends to focus its efforts on updating other facilities and improving its productivity.
“We are looking to close these plants because milk processing is more efficient if it is done at a larger scale. These are three little plants,” said Caporizzi.
“We are not properly performing in Italy. Our fresh milk segment is under attack by private label fresh milk brands in terms of price. They can put fresh milk on shelves at a very low price.”
According to the spokesman, the firm’s fresh milk sales dropped by 5% last year alone – contributing to an overall drop of 15% over the last five years.
“We have to improve our efficiency and productivity in order to remain competitive in this market.”
Caporizzi added that Parmalat intends to reinvest the money saved through the closures in upgrading its remaining nine facilities and marketing its Italian brands.
“The closure of these three plants is part of a plan for our business unit in Italy – a plan to make us more efficient. We have to improve our productivity to better compete with others.”
Parmalat is currently in talks with UILA ULI about the possibility of re-employing the soon-to-be jobless workers.
“We are talking to the workers union about these 90 workers to discuss what would be possible to do. They could be moved to other Parmalat plants for example. We will try to give these workers the chance for re-employment in the group,” said Caporizzi.
However, he was unable to speculate on when the plant closures would be completed.
“We are interested in closing the plants in the shortest time possible, but we are in discussions with the unions. It would be impossible to set a time at this point.”
When pressed on whether Parmalat had plans for further closures, Caporizzi said: “In Italy, the situation will improve. We don’t foresee any more closures.”
“It is possible that jobs may be cut in future in looking to simplify the group structure. There may be questions in the future, but not now,” he added.