Danone Restructures Production In Germany With Planned Closure Of Milk Factory

Management stated that this decision – made despite recognising the dedication of the employees and the long tradition of the factory – is deemed necessary, to ensure long-term competitiveness in the German-speaking region.

The production will be reinforced at the Fulda site, under its ‘Renew Danone’ initiative, wherein significant investment is planned, the company added.

Operational Challenges

The decision to close the Ochsenfurt facility follows several operational challenges.

Production volumes at the facility have not grown as expected, with current utilisation at only half the level recorded in 2019.

Changes in consumer behaviour and production costs considerably above the average of other Danone plants in Europe have further impacted the site’s economic viability.

Danone believes that these factors necessitate the closure of the plant, to offset persistent unprofitability, resulting from low utilisation and high costs.

The Fulda site, employing nearly 600 staff members and specialising in products such as infant formula and medical nutrition, will be the focus of future investment and strategy, the company added.

Support Measures

The management has committed to minimising the impact on employees and the local community.

Richard Trechman, managing director of Danone DACH, stated, “In recent years, we have grown in the German-speaking region in an extremely challenging environment and are strongly positioned for the future. I am very proud of what we have achieved as a team.”

Trechman further noted that, although the decision is regrettable, efforts will be made to reassign as many affected employees as possible to positions at the Fulda site.

Danone will introduce specific retraining and upskilling programmes and collaborate with the regional Federal Employment Agency and local companies to facilitate the transition of personnel.

For employees who cannot be re-employed within the organisation, Danone plans to negotiate a fair social plan with the Works Council, taking measures such as early retirement and pension-bridging into consideration.

Additionally, the company announced that it will engage with political stakeholders and regional partners to ensure that the closure does not have significant adverse effects on Ochsenfurt and its surrounding region.