GERMANY – FrieslandCampina, a Dutch multinational dairy cooperative, has acquired all remaining shares in Friesland Huishan Dairy (FHD), making it a 100% owned subsidiary of FrieslandCampina.

FHD produces tea creamers and coffee creamers on behalf of other FrieslandCampina companies, besides infant formula, located near Shenyang in Liaoning Province.

According to the company, the business was set up in April 2015 as a joint venture for the production and marketing of high-quality locally sourced infant milk formula under the Dutch Lady brand in the People’s Republic of China.

Additionally, the closing of their German site is also underway.

FrieslandCampina said the closing of the site is a consequence of overcapacities in the highly fragmented German market and years of loss-making production of private label desserts that make up the major part of the Gütersloh volumes.

This category will be discontinued, while other product lines will be transferred to the plants in Cologne, Heilbronn and Maasdam.

The planned closure of production in Gütersloh is scheduled for March 2019, with the company saying it will have a ‘negligible’ impact.

FrieslandCampina Germany managing director Jan Kruise said, “This was a tough decision to make, but previous attempts to fix the problems have failed and after careful consideration of alternative solutions the continued loss-making situation, unfortunately, has left us no other choice.

We will of course very shortly enter into consultation with the employee representatives and we will do everything that is within our power to help the affected employees find new jobs elsewhere.”

The transfer is scheduled for the second quarter of 2018.

Kruise added that, “The German market for dairy products is fragmented and characterised by fierce competition due to overcapacities.

We are convinced we will be able to master these challenges by focusing on our strong brands and through strictly consumer-oriented management of our product portfolio.”