Cutbacks at Frico

Related tags Netherlands Milk

Staff cuts and closures are looming at Frico Cheese as the company
sets out to restructure its cheese maturation and packaging
activities. The firm has warned that 192 jobs out of a workforce of
2,140 are likely to be lost.

Staff cuts and closures are looming at Frico Cheese​ as the company sets out to restructure its cheese maturation and packaging activities. The firm has warned that 192 jobs out of a workforce of 2,140 are likely to be lost, though there will be no compulsory redundancies.

The purpose of the reorganisation, according to the company, is to enable it to operate more effectively in the market and reduce costs through upscaling and efficiency improvements. The intention is to finishcarrying out the plans through to 2006.

The market for pre-packed cheese in Europe is a growth market, and Frico Cheese is keen to maintain its position as the largest producer of firm and medium-firm cheese on the continent. It argues that in order to play a competitive role, the organisation is structured properly.

Management intends to concentrate the small-product packagingactivities for the Benelux and Germany at a single facility in Wolvega,with the export activities to be concentrated in Drachten and the cheesematuration to be carried out as close as possible to the cheeseproduction facilities. It is also the intention to have all cheese maturationand packaging activities covered by the collective labour agreement forthe cheese curing industry, which is the norm for this sector.

The planned concentration of activities will lead to the closure of a number of Dutch facilities including Huizen in mid-2004, Bodegraven inmid-2005 and Raamsdonksveer in the second half of 2005. The storageand order-picking activities for the Benelux, currently still being carriedout in Raamsdonksveer, will be outsourced in mid-2005 to a logisticsservice provider.

The packaging of small products in Meppel will be transferred to Wolvega at the beginning of 2006, with the storage and order-picking activities for Germany being outsourced to a logistics service provider in mid-2004. The maturation and large-product packaging activities will remain in Meppel.

The small-product packaging activities, currently still being carried out atthe Bodegraven, Raamsdonksveer and Meppel facilities, will beconcentrated at a new facility to be set up in Wolvega. By concentratingthe cutting and packaging of cheese in slices and pieces at a singlelocation, the company hopes to improve on efficiency.

Frico Cheese, part of Friesland Coberco, also believes that the investment required will be lower in the long term than if the current situation is maintained. In addition, it says that the concentration of activities will improve services for customers and reduce the movement of products between the various facilities.

These closures follow the recent announcement that Frico Cheese is to close its cheese production facilities at Assen, Olterterp and Oosterwolde, in 2005, 2003 and 2005 respectively. Cheese production will be concentrated at eightfactories. The production of processed cheese will be in Oosthuizen.

The proposed reorganisation is in line with Frico Cheese's strategy of tryingto improve profitability by lowering costs through upscaling and greater flexibility.

Dutch-based food giant Friesland Coberco Dairy Foods​ is a multinational company that develops, produces and sells a wide range of branded dairy products and fruit-based drinks in Europe, West Africa and Southeast Asia. The company reporte a turnover last year of €4.7 billion. The group employs 16,800 staff, of whom 11,200 work outside the Netherlands.

Related topics Processing & packaging

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