Campina re-jigs dairy for added value future

By Chris Mercer

- Last updated on GMT

Related tags Campina Milk

Dutch dairy co-operative Campina has said it will close one factory
and sell off another in order to free up more funds for added value
cheese and milk, two sectors set to grow strongly in the EU.

Campina said it would sell its Belgian soft cheese factory near Passendale to French firm, Bongrain, as well as close its Dutch milk facility in Heiloo by the end of 2008.

The moves show Campina re-positioning its business to save costs and focus on higher value dairy products, reflecting a growing shift towards added value across Europe's dairy sector.

Campina's Cheese and Butter Group, which owns the Passendale factory, will now concentrate on semi-hard, naturally ripened cheese, and specifically Campina Milner and Volmer brands and North Holland cheese.

The latter has EU Protected Designation of Origin (PDO) status, which is intended to raise value by enshrining a regional product's unique qualities in law.

"Within this product line we will be expanding on our leading international position," said Piet Hilarides, director of Campina Cheese and Butter.

No fee was disclosed in the Passendale sale, although the factory has an annual turnover of around €3.38bn.

In the Netherlands, Campina said closing the Heiloo plant would enable it to focus on fresh dairy at other facilities in Rotterdam, Maasdam and Eindhoven. Milk consumption has been falling in the country but competition for space on the market has increased, dictating that Campina tightens its focus on smaller quantities of higher value milk, the group said.

It will spend €18m over two years to improve innovation.

"A textbook example is Campina's milk with a more balanced fatty acid composition, which has been available in Dutch supermarkets since the beginning of April."

More than 500 Campina dairy farmers give their cows special, natural supplementary feed which, in combination with outdoor grazing, results in the production of milk with a more balanced fatty acid composition all year round, the co-operative claims.

The Heiloo closure is likely to entail 178 job cuts, Campina said.

Many in the European dairy industry believe this kind of consolidation will continue to increase over the next few years, as part of a shift to added value markets.

Subsidy cuts as part of the EU Common Agricultural Policy reform has forced the sector to steer away from commodity markets.

Mariann Fischer Boel, European agriculture commissioner, has repeatedly said Europe's dairy industry must tap added value markets, such as cheese and functional products, for a healthy future.

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