The dairy cooperative wants to structurally cut costs by € 100 million per year from 2022. The reorganization costs of € 150 million to € 175 million are largely charged to the result for 2020.
FrieslandCampina hopes to be able to cut as many jobs as possible through natural attrition and not filling vacancies, but does not rule out forced layoffs. The top management also cuts its own flesh: they will not receive a long-term bonus this year.
FrieslandCampina also wants to close production locations and transfer production and personnel to factories that now have overcapacity. Earlier this year, FrieslandCampina announced the closure of the factory in Rijkevoort, North Branbant.
The dairy giant also alludes to the disposal of ‘non-core activities’. FrieslandCampina does not specify which activities that would involve.
“In 2020 we have entered a perfect storm,” says Hein Schumacher, CEO of FrieslandCampina. “Setbacks directly or indirectly due to the corona pandemic, such as the Hong Kong-China border that is still closed, the loss of foodservice sales worldwide, the devaluation of local currencies such as the Nigerian naira against the euro and lower bulk dairy prices will have a significant impact on our profitability in 2020 and cannot be fully offset. In addition, profit margins in the Netherlands, Belgium and Germany are under pressure. ”
FrieslandCampina is using the reorganization to accelerate the implementation of its strategy that the group initiated two years ago. According to the milk giant, the corona crisis shows that this strategy has become even more relevant, as a result of which FrieslandCampina’s vision is more sharply focused on growth segments. The aim is to get more value from an ordinary liter of milk.
Leader with healthy food
In concrete terms, FrieslandCampina will therefore focus even more on markets with higher margins. In doing so, the concern wants to be a leader with healthy food and sustainability. FrieslandCampina also strives to be closer to the customer.
The cooperative has 24,000 employees in 36 countries and achieved a turnover of € 11.3 billion last year. With 17,413 dairy farmers as a member, FrieslandCampina is the largest dairy cooperative in the world.
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