Danone in talks to divest factory in Spain facing closure plans

SPAIN – Danone, a world-leading food company, is considering a discussion with a possible suitor to unload a factory in Spain that the French group intends to close.

The French group said the planned closure would improve “competitiveness and industrial efficiency” and “is part of a rationalization process, in view of the need to reduce capacity, concentrate volumes, in order to guarantee the continuity of the brands and to gain competitiveness and industrial efficiency”

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Danone’s Spanish arm has confirmed that negotiations with the workers are still open and the company maintains the proposal to pre-retire 50% of the workers, to offer transfers if there are vacancies in other plants in Spain, and a commitment to re-qualification to guarantee 100% relocations in other activities.

At the same time, the company is holding talks for the sale of the factory to a solvent buyer that guarantees industrial continuity in Salas, the company added.

Despite the fact that yesterday there was a mobilization by the workers, the arm said that minimum services were maintained to ensure the continuity of production in the factory that manufactures desserts, fresh cheese, and cheese flan.

Spain, the host of Danone España, which employs 2,000 workers in the country, is one of Danone’s largest markets in Europe based on annual sales.

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In March, Danone held a capital markets day to set out its strategic plans under recently-installed CEO Antoine de Saint-Affrique.

The newly-appointed COO Vikram Agarwal touched on how the company views its manufacturing network.

Agarwal said Danone wants to make its “operations fit for the future”, which includes “an efficient, yet flexible, manufacturing footprint”.

He added: “I take this in two parts. The first part is what I call the four-wall efficiency: doing better within the four walls of our factory and stretching our assets to the maximum, improving our operating efficiencies, and improving our factory yields. “

And, secondly, looking at how our footprint is placed and whether that is still in tune with the growth mix that we have between our categories: for example, plant-based, certainly investing in more capacities behind it.”

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Elsewhere, Staff at the company’s bottled-water plant in Sant Hilari Sacalm, a town in Catalonia north of Barcelona, have embarked on four days of industrial action amid a dispute over pay.

Despite the strike, Danone has insisted that production at a strike-hit bottled-waters factory in Spain has been maintained.

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