FrieslandCampina, a Dutch dairy co-op, has revealed its intentions to cut costs across its business. The company aims to save €400-500m ($423-528m) in costs starting from 2026. While further details are yet to be announced, the company plans to disclose the impact of these measures by mid-December. The company does not plan to close any factories but expects job cuts to occur.
In a statement, FrieslandCampina explained, “The entire company has to reduce costs, with the main focus on the support functions. This will result in restructuring and job losses.” Jan Derck van Karnebeek, the CEO of FrieslandCampina, emphasized the importance of improving business performance to generate maximum value for their milk-producing members.
In 2022, FrieslandCampina experienced revenue and earnings growth; however, its profitability declined in the first half of this year due to lower commodity dairy prices and reduced volumes.
The net profit of FrieslandCampina decreased by 94.2% to €8m, and the operating profit dropped by 85.7% to €47m. However, revenue rose by 4.6% to €6.9bn and by 6.9% at constant currencies.
Van Karnebeek highlighted the company’s focused strategy for specific customers, products, brands, and markets as a way to significantly improve their competitiveness. He stated, “Our sharpened strategy will greatly improve the way we work and compete.”
FrieslandCampina plans to allocate part of its annual savings to offset inflation and invest in sustainable growth to increase profitability. Additionally, the company intends to double the capacity of whey protein isolates at its production facility in Borculo, Netherlands, to meet the rising demand from sports nutrition and infant formula customers.