News Milk processing
FrieslandCampina opens door for new members
FrieslandCampina is emphatically opening the door to new member dairy farmers. This was stated by the Members' Council in the meeting that took place on Tuesday 14 December. The goal is to review the membership recruitment policy next year. The Members' Council was also informed about the continued appointment of Hein Schumacher as CEO.
The fact that FrieslandCampina wants to recruit new members is a result of the aim to maintain the milk processing volume until 2030. This is where the shoe pinches, because the dairy cooperative had to contend with an exodus in recent years. This year, 270 members left, mostly because of dissatisfaction with the policy pursued.
In previous years too, hundreds of member dairy farmers sought refuge elsewhere, while others stopped. In addition, the permanent members were motivated not to increase production. This so-called 'balanced growth scheme' has never been applied and has since died a quiet death.
Overcapacity in factories
FrieslandCampina has now reached a point where there is overcapacity in the factories. The estimated annual cost, due to understaffing of the lines is estimated at €100 million. To do something about this, the influx of new members is controlled. "To be able to optimally process and add value to the milk supply, there will be room for growth of existing member dairy farms and for the influx of new members," says cooperative chairman Sybren Attema.
Although FrieslandCampina, on the whole, is an attractive milk price pays out, it is not necessarily likely that a caravan of dairy farmers will report. Potential entrants will have to buy into the cooperative. Under the current membership recruitment policy (which runs until the end of 2022), the entrance premium is €15 per 100 kilos of milk. For an average dairy farm with an annual supply of 1 million kilos, this amounts to €150.000. But even then you can't deliver a drop of milk. In addition to the entrance premium, delivery certificates must also be acquired for €8 per 100 kilos.
Such high amounts represent a barrier, compared to the delivery terms of private processors who are currently also actively recruiting dairy farmers. Moreover, the turmoil that reigns in the ranks of the cooperative not blown over yet† It is possible that FrieslandCampina will tinker with the entrance premium in the new member recruitment policy to lower the threshold. That seems easier than it is, because this is a sensitive point with the existing members.
Schumacher's second term
In addition to announcing intended changes to the hiring policy, FrieslandCampina announces that Hein Schumacher will remain the CEO for the next four years. The Supervisory Board has decided this and the Members' Council was informed about this decision today (Tuesday 14 December). For Schumacher this means his second term as ultimately responsible for the dairy group. Before that he was CFO.
According to cooperative chairman Sybran Attema, Schumacher's stay ensures continuity. Schumacher is seen by him as the right man to lead FrieslandCampina through the multi-year transformation. "We have every confidence that Schumacher and his leadership team will successfully continue on this path," said Attema.
Wouter Job
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