FrieslandCampina to invest in efficiencies of scale and to close two plants

24 November 2010

Dairy multinational Koninklijke FrieslandCampina N.V. plans to invest EUR 47 million to improve efficiency at its cheese plants in Workum, Marum, Balkbrug, Gerkesklooster and Leerdam. The cheese plants at Varsseveld and Leerbroek will be closed. The number of staff at the plants Marum and Gerkesklooster will be reduced. All sites are located in the Netherlands. These measures will result in the loss of a total of 159 jobs and create a further 52 new positions. Staff at the affected plants were told of the plans this afternoon. The employee representation bodies have been asked for advice and the relevant trade unions have also been notified.

Piet Hilarides, COO Cheese & Butter at Royal FrieslandCampina: ‘The purpose of these measures is to further strengthen our international competitive position in cheese. Cost reductions through economies of scale and efficiency improvements are an essential part of our strategy route2020. Regrettably, this will have consequences for a number of employees. We will do our utmost to help those affected to find new positions, either within FrieslandCampina or elsewhere.’

The Executive Board of FrieslandCampina plans to close its cheese production plant at Varsseveld during the fourth quarter of 2012. This will result in the loss of 65 jobs (55 FTEs and 10 contract staff). The Varsseveld plant produces the round Gouda cheese, the Gouda cheese block and Edam loaf cheeses. The total production volume is approximately 34,000 tonnes of cheese. Demand for these types of cheese is falling. At the same time, demand for Gouda cheese in the Euroblock format is growing. FrieslandCampina will therefore invest EUR 31 million to expand production capacity at its production plant in Workum. This will boost total production capacity at the plant from 65,000 to 115,000 tonnes of cheese, making it one of the world’s biggest cheese plants. The number of employees at Workum will increase by 21 to a total of 136. The expansion must be completed by the third quarter of 2012.

Within FrieslandCampina, there is overcapacity in the ripening and packaging of small format Gouda cheese. In mid-2011, the Executive Board plans therefore the closureof the cheese ripening and packaging plant at Leerbroek. This will involve the loss of all 24 jobs (23 FTEs and  1 contract worker). The cheese ripening activities will be relocated to Gerkesklooster and the cheese packaging activities will move to Leerdam.

In Gerkesklooster EUR 530,000 will be invested what will lead to the creation of one new position in cheese ripening at FrieslandCampina in Gerkesklooster. The relocation of the packaging activities from Gerkesklooster to Leerdam will result in the loss of four jobs at Gerkesklooster. Three new jobs will be created at FrieslandCampina in Leerdam, giving a total of 275 by the end of 2012. EUR 270,000 will be invested in the expansion of capacity at Leerdam.

In 2011, EUR 12 million will be invested in the automation of production and ripening of Edam cheese at the production plant in Marum. This will reduce the number of staff from 66 (52 FTEs and 14 contract staff) to 23.

In 2011, EUR 3.8 million will be invested in expanding production capacity at the cheese production plant in Balkbrug by 9,000 tonnes, giving a total of 57,000 tonnes. The number of staff will increase by 4.5 (packaging and dispatching) to a total of 111. 

Social consequences
FrieslandCampina’s Social Plan will be applied to the permanent staff in the Netherlands who are affected by these changes. In the Netherlands, the proposed measures will result in the loss of 159 of the total of 7,100 jobs and create 52 new jobs. FrieslandCampina will do its utmost to help those affected to find new positions that are acceptable to both employee and employer. These placements will if possible be within FrieslandCampina, but if this cannot be achieved within a reasonable timeframe, they may be sought outside the company.

In December 2009, FrieslandCampina announced its intention to close six locations (Elsterwerda and Kalkar in Germany, Tilburg, Dronrijp (Cheese) and Drachten in the Netherlands and Klerken in Belgium) in 2011 and 2012. The closures will result in the loss of 624 jobs.