BELGIUM – Royal FrieslandCampina has said that it is investigating the possibility to close its mozzarella cheese production location in Bree, Belgium since the production facility ‘does not live up to the profitability expectations’.
The company said management is considering to stop continuation of operations at the facility as it does meet the company’s long-term business strategy.
According to a statement from the company, formal information and consultation process was started and the closure will affect 28 employees who have since been informed.
“We understand that this is hard for the employees and the management involved and we will offer them appropriate support,” said Hans Meeuwis, President FrieslandCampina Dairy Essentials.
“We have looked at solutions.
Unfortunately, they did not lead to a positive outcome. Based on this, we decided to investigate the closure of the production site.
An important part of our strategy is adding more value to basic dairy (cheese, milk powder and butter).
That is why mozzarella for FrieslandCampina, remains an important addition to the existing cheese assortment. FrieslandCampina will keep exploring the opportunities to further strengthen its position in this market.”
In November last year, the company made a similar move, closing its milk processing facility in Gütersloh, Germany.
The measure consequently which affected 231 employees was geared towards restoring profitability within three years.
The company said closing of the site in Gütersloh was a consequence of overcapacities in the highly fragmented German market and of years of loss-making production of private label desserts that made up the major part of the Gütersloh volumes.
This was central to the company’s strategic refocus on considerable investments in its core brands, such as Landliebe, Tuffi and Frico.
The dairy giant posted a revenue decline of 5.8% in the first half of its financial year, to US$6.52 billion, largely blamed on currency effects.
Profit was down 32.7% for the period, largely due to losses on cheese, butter and milk powder basic dairy sales, with price fluctuations in the dairy industry having an impact on its production processes.
In 2017, FrieslandCampina agreed to sell its fruit juice business, Riedel to Dutch investment company Standard Investment to focus more on its dairy portfolio.