Unrest at Hochwald Foods amid reorganisation

Concern is growing at dairy cooperative Hochwald in central Germany over a possible reorganisation. According to leaked reports, this would involve the closure of two sites. A spokesperson does not want to confirm anything for now. The spokesperson would only confirm that a merger is not under consideration. According to Germany’s Lebensmittelzeitung, the information emerged from a Hochwald members’ meeting. Reorganisation plans were reportedly discussed there. Management reportedly wants to prepare the cooperative for the future at a faster pace. The plans form part of the ‘Hochwald 2020’ and ‘Prepared for Tomorrow’ programmes. Not only do production facilities need to be modernised, but the sales organisation and other departments are also to be streamlined and made more competitive. A decision is expected at the end of May, just before the presentation of the annual figures. In recent years, Hochwald has continuously invested in new facilities and also in new installations at existing factories, both in Germany and in the Netherlands, but the company still has a few older locations. Two of them, the factories in Weiding in Bavaria and in Kaiserslautern, are now said to be slated for closure. In Weiding, consumer dairy products are mainly made, partly under the own brand Bärenmarke. In Kaiserslautern, mainly long-life milk is produced. Both sites are said to be ageing and no longer profitable to operate.Taken by surpriseHochwald appears to have been taken by surprise by the leak of the news and now faces a choice between remaining silent until early June – risking further unrest – or commenting on the plans sooner. Last year Hochwald received almost 2.3 billion kilos of milk and the company achieved a turnover of more than €2 billion. The cooperative is regarded as paying competitive milk prices, also in the Netherlands, where it has a subsidiary in Bolsward, and generally also achieves good business results. The company does, however, face a rapidly changing market environment. At the end of May, a decision is expected on the merger of Arla with DMK, and competition from other dairy companies is also increasing.