TINE "will undergo significant changes"10 Sep 2019
TINE, Norway's largest producer, distributor and exporter of dairy products with 10,000 members (owners) and 8,000 cooperative farms, says it will undergo significant changes over the next three years.
The company says it faces major changes with the loss of Jarlsberg exports, tougher competition and changes in consumption patterns.
“We must create customer growth while streamlining operations. TINE is the dairy farmer's most important insurance and must be further developed to secure the future of both dairy farmers and employees,” said TINE board chairman Marit Haugen. “I am very proud of what TINE has done. Now we must equip TINE and Norwegian dairy producers to be able to contribute to Norwegian food production and living communities for another 150 years. Our analyses show that both profitability and volume will disappear without powerful measures.”
“We must change to preserve. The owners expect measures to strengthen the competitiveness of a dairy market where TINE's shares in several categories have been in sharp decline over several years. We will invest in more innovation and in areas where it grows - it is simply healthy farmer's fat,” said Haugen.
A number of measures have been drawn up that are now being implemented to strengthen competitiveness. TINE will bring together sales and marketing in a commercial team and at the same time, TINE is establishing a corporate area for long-term innovation and digitalisation.
According to the company, 8-10% of Norwegian milk volume will be cut, while 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, says Haugen.
Will reduce staff by 400 man-years and save 1 billion
At the same time, TINE is starting to streamline operations throughout TINE. This entails improvement measures with the aim of reducing costs by at least NOK 1 billion. It will also bring down staffing.
- We need to improve how we interact and use our resources more effectively in the future. Lower milk volume also results in less activity and need for resources. Therefore, we must reduce staff by about 400 man-years by the various functions of TINE SA by the end of 2021. These are measures that will affect many good employees in TINE and it is very regrettable. So I promise that all employees will be well looked after in the upcoming restructuring work. We will work well with union representatives as we have experience with such processes in the past, ”says Hovland.
Group representative in the TINE Group, Tor Arne Johansen, says he sees that significant changes are needed and that this will unfortunately, among other things, lead to downsizing.
- It is still too early to say how much the downsizing will be in the various corporate areas of the company. I have confidence in - and expect - that the management will involve union representatives in a proper way as we are used to from before, says Johansen
- We are confident that the employees want the best for the dairy farmer's company and are looking forward to the important job to be done. We are convinced that TINE's ability to constantly improve, strong brands and quality, provides very good conditions for success in this demanding change, Hovland concludes.
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