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FrieslandCampina has announced its intention to reshape its top structure, aiming to boost business performance and profitability. The change follows the appointment of Jan Derck van Karnebeek as CEO in June. The business will be divided in seven business groups and will be led by an Executive Team.

Starting in October, the new executive team will consist of 12 members, including seven presidents of the business groups and five functional leaders.

“The company’s profitability is under pressure,” highlights Jan Derck van Karnebeek, CEO at Royal FrieslandCampina.

“Therefore, in the coming period, we will take the necessary steps to improve profitability. The first step is to reshape our top structure and announce the corresponding appointments.”

The announcement comes after Derck said earlier this year that 2023 has been “challenging.” Low commodity dairy prices are putting pressure on the business’ margins. According to the UN FAO, dairy prices are plummeting, declining 4% in July – the eighth consecutive monthly decline – and are now 22.4% lower than last year. 

Additionally, the company says it faces higher expenses due to energy and raw material prices, labor costs, foreign exchange rates and interest rates.

Strategic moves
The company also revealed its plan to split up its current Food & Beverage business group into five separate business groups, each with its own characteristics and market strategies, effective January 2024. 

FrieslandCampina will split up its current Food & Beverage business group into five separate business groups.The new business groups are Europe, Retail & Americas, Middle East, Pakistan & Africa, Asia and Professional. The current business groups, Ingredients and Specialized Nutrition, will remain unchanged.

The company also stated that more clarity on its sharpened strategic direction, Expedition 2030, will be provided in October. Further details on organizational implications will be announced in the coming period.

Troubling times for sector
To optimize production and navigate the complex environment, FrieslandCampina announced job cuts earlier this year, planned for mid-2025.

FrieslandCampina also sold part of its German dairy operation to focus on high-performing brands. 

Danish dairy producer Arla Foods also recently noted that the European dairy category slowed down in 2022 and that revenue for butter suffered a decline. 

“FrieslandCampina has a diversified business, product and customer portfolio, which enables it to spread its risks well and as a result, among other things, offer its member dairy farmers a leading milk price,” Derck says.

“I am confident that with this new leadership team in place, we will fulfill FrieslandCampina’s purpose of providing better nutrition for the world, a good living for our farmers, now and for generations to come,” he concludes.

Source : Nutrition Insight Sep 19 2023 by By Marc Cervera

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