GLOBAL DAIRY NETHERLANDS
All change at FrieslandCampina Words by: Sjoerd Hofstee
F
rieslandCampina, one of Europe’s largest dairy co-ops, has been struggling to make a profit for three years in a row. But in recent months it has been less about the company and more about the co-operative. The chairman resigned three months after taking office, to be replaced by a veteran. The results at FrieslandCampina have been disappointing for several years now. This year, too, the management is again struggling to turn a profit. However, members need not worry about the company’s financial stability, the chief executive and chief finance officer recently emphasised in a specially scheduled webinar.
The disappointing results naturally cause irritation among dairy farmers. But there is clearly more going on. Only the return on invested capital is much lower than hoped; an inheritance from around 2015. Then, large expensive factories were built that are now not being used properly due to less milk supply (see table). The disappointing results naturally cause irritation among dairy farmers. But there is clearly more going on. Last year, the Members’ Council approved the board’s proposal to overhaul the co-operative’s entire financing system. In short: all milk supplied must be matched by €8 ($NZ13) 18
Cows in the Netherlands, home of FrieslandCampina.
per 100kg of milk. RESULTS VS. FORECAST BY FRIESLANDCAMPINA FrieslandCampina Target 1st half year 2021 had not arranged this in such a way in recent Net debt total (in million €) 1,165 years because many Net debt / EBITDA <2,5 1.7 former members left Interest ratio covering >3,5 7.5 their capital (partly) in the co-op. Now these Solvability >35% 39.20% are slowly but surely Return on invested capital >10% 3.30% disappearing, many (young) farmers are obliged to invest more money in their coThis internal struggle shows how op in order to be able to supply milk. emotions and contradictions can arise Another delicate issue is the requirement if the financial results are disappointing of the dairy company for farmers to over a long time. But it also exposes an produce more sustainably and to meet the important question for large dairy codemands of customers such as Unilever, operatives worldwide such as Arla, DMK Nestlé and Danone. Many member and Fonterra to consider again and again: dairy farmers are extremely annoyed by who has which responsibility within the the increasing regulatory pressure and company and the co-op and how do you, interference from their own dairy coas directors and member dairy farmers, operative. get along when things don’t go well for Last December, a critical dairy farmer a while? FrieslandCampina has set an and member joined the central board. example of what not to do. He resigned again after eight months. And now Sybren Attema, who from Subsequent debate saw co-operative FrieslandFoods helped set up the merger chairman Erwin Wunnekink also leave, with Campina to form FrieslandCampina just three months after taking up this in 2008 as chairman at the time, can once position. again hold sway. Behind the scenes, on top of the Attema is younger than Joe Biden, who irritation about the mediocre results and became president of the United States interference, a major battle was going on at almost 80 years old, but is also retired about how the co-op and company should and no longer an active dairy farmer. be managed. However, the relationships between One camp wants to look over the members, members’ council and central shoulder of the management and help management have deteriorated to such make decisions. Other (main) board an extent, an old-timer has stepped in members stated that this way of managing to restore peace. It’s not a situation to be absolutely cannot and should not be done. jealous of. The board must control the management, but certainly not dictate how they should • Sjoerd Hofstee is a dairy journalist at do their work from day to day. Persbureau Langs de melkweg, Netherlands. Dairy Exporter | www.nzfarmlife.co.nz | December 2021
