“We must create customer growth while streamlining operations,” said TINE board chairman Marit Haugen.
Today, TINE has 10,000 members, 8,000 farms, 34 plants and 4,300 employees.
“Now we must equip TINE and Norwegian dairy producers to be able to contribute to Norwegian food production and communities for another 150 years,” Haugen said.
Haugen, together with TINE's CEO, Gunnar Hovland, introduced the new strategy at TINE's leadership. The company expects to see effects as early as 2020, while some of the projects have a time scale of 2025.
Haugen said the cooperative must change to survive.
She said the review revealed the company needs to become more competitive. Growth needs to be strengthened and costs have to go down significantly.
This means that 8-10% of the Norwegian milk volume will be cut. Lower production and post-payment means that dairy farmers will have a significant fall in income in 2020 and the years to come.
“The situation is serious and complex. If we are to have sustainable, Norwegian milk production that contributes to value creation across the country in the future, TINE must do everything possible to minimize this fall in income,” Haugen said.
Job losses and savings
TINE said it is looking to streamline operations to save in the region of NOK 1bn ($110m). This will result in job losses.
Haugen said the cooperative would need to reduce staff “by about 400” by the various functions of TINE SA by the end of 2021.