DMK Dubs 2015 Dairy Market “Crisis-Torn” as Reaffirms Strategy to Make $68 Million in Cost-Savings
22 Jun 2016 --- DMK, the German’s dairy co-operative, has said that investments and cost-savings are likely to help its financial performance in 2016, after suffering a “crisis-torn” 2015.
DMK, which is merging with the Dutch dairy cooperative DOC Kaas, said revenues in 2015 fell to €4.6 billion ($5.2bn) in 2015, from €5.3 billion ($6bn) in 2014, as it was hurt by lower market prices for milk and dairy products.
However, DMK executives are confident that by introducing cost-savings of €60m ($68m), allied to key investments, it will be better placed to combat the challenging dairy market.
Its focus is on strengthening its branded products business and innovating across it. It said its Milram spread and drinks brand made a positive contribution to its results in 2015, despite a tough market.
Its leading export label Oldenburger, meanwhile, developed well in 2015 while its ingredients unit made a profit over the year.
Dr Josef Schwaiger, CEO, said: "The crisis-torn year in 2015 has shown that the DMK GROUP's long-term strategy is the right one, even if every possible cent needs to go, and is going, to the farms at the moment."
Looking forward, DMK offered a mixed outlook but said it believes its decision to cut costs would prove beneficial over the long-term.
It said that its profits will suffer less than in 2015 due to investments in the business, including new facilities in Zeven, Georgsmarienhütte and Erfurthave which would help improve competitiveness.
German and Dutch dairy farmers are also expected to reap benefits from its merger with DOC Kaas because of synergies in production and sale of cheese and fresh dairy products.
DMK also earmarked new markets as key to successful growth over the long-term "In view of the saturated domestic market".
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