Danone Announces Plant Closures Across Three European Sites
12 Jun 2014 --- Danone has announced plans to close plants in Italy, Germany and Hungary following a “significant decline in sales” in these regions since 2010. The drop in sales has been attributed to a “lasting” downturn in the European economy and also consumer spending.
Volumes sales across Europe are seeing gradual improvement, the company stated, but the group’s Fresh Dairy Products division in Europe has seen overall business fall back, and it also mentioned “local cases of surplus capacity”. Danone announces plan to close plants in Casale Cremasco (Italy), Hagenow (Germany) and Budapest (Hungary) —all countries particularly hard hit by the fall in sales.
The company believes that the planned closure of these three plants and a gradual shift in production volumes to Belgium, Poland, Germany and France should allow the Fresh Dairy Products division to improve its production capacity and competitive edge in Europe.
Fresh dairy volumes fell in the first quarter of 2014 to the lowest level in more than a decade, according to reports, as Danone raised prices and introduced more expensive products. Dairy volumes will worsen in the second quarter before starting to improve in the third, the company said in April.
The plant closures will lead to the loss of 100 positions in Italy, 70 in Germany and 155 in Hungary. Working closely with works council representatives, Danone intends to take social measures identifying job solutions for each of the employees who might be concerned. This project would be fully implemented by mid 2015.
Danone is an international company present on all continents, with brands such as Activia and Actimel. The group holds top positions in healthy four businesses: Fresh Dairy Products, Early Life Nutrition, Waters, and Medical Nutrition.
Danone has over 190 production plants and around 104,000 employees. In 2013, the company generated sales of over €21 billion, with more than 60% in emerging countries. It makes 60% of its revenue in dairy.
