Campina Concentrates on Production of Fresh Dairy Products for Sales Development

14/05/07 Campina wishes to concentrate production of fresh dairy in the Netherlands in its production facilities in Rotterdam, Maasdam and Eindhoven. The co-operative dairy company intends to close its facility in Heiloo at the end of 2008. Developments in the sales of fresh dairy products are the primary drivers for concentrating production.

For consumers, the Dutch market for fresh dairy, in which Campina is the largest player, is increasingly characterised by more distinctiveness and more variation in fresh dairy. Milk is milk, but not all milk is the same. A textbook example is Campina’s milk with a more balanced fatty acid composition, which has been available in Dutch supermarkets since the beginning of April. More than 500 Campina dairy farmers give their cows special, natural supplementary feed which, in combination with outdoor grazing, results in the production of milk with a more balanced fatty acid composition all year round. Campina collects and processes this milk separately from other milk in its production facilities in Rotterdam and Eindhoven. The volume involved amounts to some 200 million consumer litres per year. Viewed over a longer period, the consumption of fresh dairy (milk, yoghurt, custard) has been declining in the Netherlands whereas competition continued to grow.

Investments

Owing to these developments, Campina has decided to invest nine million Euros this year and the next in further concentration of production in Rotterdam, Maasdam and Eindhoven.

By focusing on these three production facilities, Campina can continue to invest more specifically in the production of innovative products, such as Campina milk with a more balanced fatty acid composition and Campina VlaFlip. Another advantage is an increase in capacity utilization of these facilities. Added value products and cost control are essential to bring permanent value to milk for the member dairy farmers, who together are the owners of Campina.

The intended closure of Heiloo affects 178 employees (FTEs). All jobs in Heiloo will be terminated from the end of 2008 at the latest. Campina is unable to offer any significant alternative employment in the region. The organisation will therefore actively guide and support staff to find alternative work. New jobs will be created in Rotterdam, Maasdam and Eindhoven, but ultimately more than 100 jobs will be lost in Campina’s consumer milk activities in the Netherlands.

Campina has informed the central works council and the unions of its intended decision.