FrieslandCampina has sold its yoghurt and dessert making facilities in Elsterwerda, Germany, as the company puts into action restructuring plans that will result in 942 job losses.
At the end of 2009, the Dutch company announced its intention to close six sites in the Netherlands, Germany, and Belgium and shed 942 jobs in an effort to create an efficient company structure following the merger of Friesland Foods and Campina a year previously.
Of the six sites that were earmarked for closure, the yoghurt and dessert factory in Elsterwerda, Germany, was one of the largest, currently employing 330 people.
FrieslandCampina has now signed a deal with the German company ODW Frischprodukte, a subsidiary of Odenwald Früchte, to sell the land and buildings, along with some of the production equipment.
ODW Frischprodukte will take over the site from December this year. Initially ODW Frischprodukte will take on the 330 current employees but FrieslandCampina said the new owner plans to reduce the workforce gradually.
Commenting on the change of ownership, Dirk Jan Hoekstra, supply chain director at FrieslandCampina Consumer Products Europe said: “Following the announcement of the closure, we investigated the options of finding a new use for the Elsterwerda location and we succeeded.
“We’re convinced that the transfer to ODW Frischprodukte means that the Elsterwerda location is in good hands.”
FrieslandCampina is not letting go of all association with the Elsterwerda site straightaway, as a number of its products will continue to be manufactured there until 2013. But it will be relocating production lines for yoghurt and desserts to other locations in Gütersloh and Heilbronn over the next couple of years.
Significant reorganisation is planned during this period across the whole business as it looks to take advantage of synergy opportunities created by the merger of Friesland Foods and Campina.
This work is expected to put some strain on profitability in the short run as investment costs and social charges put downward pressure on margins. But from 2012 onwards, FrieslandCampina expects to start seeing the positive effects of restructuring appear on its income sheet. When originally announced in 2008 a reduction in outgoings of €175m by 2012 was predicted.