FrieslandCampina to shutter German plant with 231 job losses

29 Nov 2017

FrieslandCampina has announced measures to improve profitability, including the closure of the plant in Gütersloh, which will affect 231 employees.

FrieslandCampina to shutter German plant with 231 job losses

FrieslandCampina has announced a comprehensive reorientation in the German market. Central to the strategic refocus are considerable investments in its core brands, such as Landliebe, Tuffi and Frico, a bundling of its commercial activities in the Düsseldorf area and other measures to improve profitability. The measures include the closure of the plant in Gütersloh, which will affect 231 employees. These efforts should result in restoring profitability within three years, the company said.

“The German market for dairy products is fragmented and characterised by fierce competition due to overcapacities,” said Jan Kruise, Managing Director of FrieslandCampina Germany. “We are convinced we will be able to master these challenges by focusing on our strong brands and through strictly consumer-oriented management of our product portfolio. We are the only company with a substantial presence in all dairy categories and channels, and we will benefit from this competitive advantage by proving ourselves a preferred partner in the market in accordance with our strategy. In order to achieve our ambitious goals we will invest in our business and we will not shy away from difficult decisions that will open up the path to a successful future for the long term. We are here to stay.”

North Rhine-Westphalia (NRW) has historically been a key region for FrieslandCampina, it said. Many member farmers are based there and Tuffi is a strong local brand.

“By relocating and consolidating commercial functions to the Düsseldorf area we expect FrieslandCampina to benefit from the strong talent base in the area and to drive the Germany strategy more effectively,” said Kruise.

According to FrieslandCampina, NRW is an important centre of consumer product and food industries. The affected commercial employees from Heilbronn and Cologne, totalling 74, will learn more about the opportunities at the new location in the context of the talks with the Works Council which are due to start very shortly. The transfer is scheduled for the second quarter of 2018. The plants in Heilbronn, Cologne and Schefflenz as well as their workforce numbering 366, 326 and 23 respectively, will not be affected by the intended move.

The closing of the site in Gütersloh is a consequence of overcapacities in the highly fragmented German market and of years of loss-making production of private label desserts that make up the major part of the Gütersloh volumes, the company said. This category will be discontinued, while other product lines will be transferred to the plants in Cologne, Heilbronn and Maasdam in the Netherlands. Gütersloh processes German milk.

The impact of the closing of the site on the available processing capacity of FrieslandCampina will, it said, be negligible. The planned closure of production in Gütersloh is scheduled for March 2019 and the employees involved were informed today.

“This was a tough decision to make,” Kruise said, “but previous attempts to fix the problems have failed and after careful consideration of alternative solutions the continued loss-making situation, unfortunately, has left us no other choice. We will of course very shortly enter into consultation with the employee representatives and we will do everything that is within our power to help the affected employees find new jobs elsewhere.”