FrieslandCampina has given an indication of its plans to cut costs across the business.

The Dutch dairy co-op, which saw its first-half profits slump more than 94%, is looking to save €400-500m ($423-528m) in costs from 2026.

Further details will be announced “in the coming months”, the company said. It intends to set out the impact of the plans by mid-December. Factories will not be closed, although jobs are set to be cut.

“The entire company has to reduce costs, with the main focus on the support functions. This will result in restructuring and job losses,” the Dutch Lady milk owner said in a statement.

Jan Derck van Karnebeek, who took the helm at the start of June after previous CEO Hein Schumacher joined Unilever, said: “Our goal is clear: produce top-quality products from our members’ milk and by doing so generate maximum value for them. Income that our members need to continue investing in the sustainable future of their farms. That is why it is so important that we structurally improve our business performance.”

FrieslandCampina saw its revenue and earnings rise in 2022 but, in the opening six months of this year, the company’s profitability curdled amid lower commodity dairy prices and a fall in volumes.

Net profit decreased 94.2% to €8m. Operating profit dropped 85.7% to €47m.

Revenue rose 4.6% to €6.9bn and by 6.9% at constant currencies.

Van Karnebeek added: “Our sharpened strategy with a focus for each business group on specific customers, products, brands and markets will significantly improve the way we work and compete.”

FrieslandCampina said part of the planned annual savings will be needed to offset inflation. It will also look to invest in “sustainable growth” and increase profits.

Alongside the news of cost-saving plan, the company said it would invest in its production facility in the Dutch town of Borculo to double the capacity of whey protein isolates. The move, it explained, would help its ingredients business meet demand from sports-nutrition and infant-formula customers.