In an announcement this week, the dairy multinational revealed the manufacturing facilities based in Dronrijp and Gerkesklooster will close as from 1 April 2022, with production moved to other locations.
The whey and milk powder tower in Gerkesklooster will be discontinued on 15 January 2021 with 57 job losses at both locations.
“Our intended decision to discontinue the powder production in Dronrijp and to relocate these volumes elsewhere in our network came about after careful consideration,” says Herman Ermens, President FrieslandCampina Ingredients.
“We looked at current production capacity and future market developments. I am aware that this decision will have a big impact on the involved employees, and we will, of course, provide them with proper guidance and support during this process.”
The scaling down of the firm’s production facilities follows October’s closure of its plant in Rijkevoort, where all 86 employees were made redundant.
Only last month, FrieslandCampina announced it was to accelerate the progression of its transformation strategy 'Our Purpose, Our Plan,' citing the effects of COVID-19 as a reason.
The strategy outlines one objective, which looked to reduce structural overcapacity through plant closures or by relocating production volumes.
The discontinuation of the activities in Dronrijp and Gerkesklooster fits in this strategy and will contribute to the announced cost savings.
“We are continuously looking for ways to further improve our position with regard to milk processing, value creation and cost optimisation,” explains Hans Meeuwis, President FrieslandCampina Dairy Essentials.
“Needless to say, we do this with all interests in mind and concern for all employees involved. This step fits in with the further improvement of our position. As a site, Gerkesklooster remains important for the production of other dairy products such as cheese.”
FrieslandCampina’s strategy also looks to beef up its infant nutrition interests with the introduction of a new route to market in Hong Kong/China.
Hong Kong has been an important gateway to southern China for FrieslandCampina for many years. As the borders between Hong Kong and China are still closed, that route to market is no longer viable and the profitability of our business in Hong Kong is under tremendous strain.
“We are implementing a new route to market for Hong Kong and southern China, with a prominent role for e-commerce and product innovations,” the plan outlines.
“Nonetheless, it will take time before this new route to market has replaced the old one in terms of revenue and profit.”