Danone plans to shut a dairy plant in Germany, pointing to production costs and the facility not using its full capacity.
The Activia maker said it is lining up the closure of the site in Ochsenfurt by the final quarter of next year.
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In a statement, Danone explained the decision was necessary as the “only way to remain competitive and successful in the long term in German-speaking countries”. Around 230 jobs will be affected.
The French giant said production costs at the site are “well above the average of other European Danone plants”. It also cited “years of inefficiency caused by declining capacity utilisation”.
Danone said the facility’s capacity utilisation is expected to reach only half of 2019 levels in 2024, making the closure “unavoidable”.
Richard Trechman, managing director for Danone’s operations in Germany, said the plant is “not sustainable in the current market situation”.
“There is less consumer demand for the locally manufactured products and high-potential Danone products cannot be produced locally,” Trechman added.
The Ochsenfurt plant manufactures dairy products, desserts and high-protein puddings. Asked from where Danone would ship these products to Germany after the closure of the site, a spokesperson said: “Where the products will be concretely produced after the planned closure will be decided in the coming months.”
Danone said “remains committed” to Germany as a manufacturing base and plans “significant investments” at its Fulda site, the company said in its statement.
The Fulda facility, with nearly 600 employees, is focused on producing specialised products such as baby formula and medical nutrition.
The spokesperson said: “Our Fulda facility is one of Danone’s largest production sites globally, supplying products to over 70 countries, including Germany. The plant plays an important role in the company’s overall strategy, and we are investing every year a double-digit million euro amount in modern, high-tech production capacities.”
The company said it will review vacancies at the Fulda plant to offer retraining opportunities for affected employees in Ochsenfurt.
