Background Milk
FrieslandCampina board is taking small steps for change
These are small steps that the FrieslandCampina Members' Council approved at the traditional December meeting, on the way to possibly more: a different hiring policy, refreshment of the board and possibly an adjustment of the 'strategic options'. meanwhile, a third driver cleared the field.
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The new chairman Sybren Attema agreed, but he did not yet put his own stamp on it. That would also be difficult, because Attema was only recently appointed. In the coming months, until the presentation of the annual figures, he wants to maintain radio silence and possibly make further decisions afterwards.
No livestock farmers in line
The observation that there is room for the influx of new members means little without a concrete follow-up. Few dairy farmers are queuing up to become a new member by paying €23,00 per 100 kilos of milk, with or without a financing arrangement. The entry costs are too high and the returns too low. Especially in the current circumstances. The competition is strong, requires less payment, and also on more flexible terms. If FrieslandCampina wants to maintain its scale in milk processing in 2030 and remain a player on the global market, as the company wants, more must be done, several members believe.
This should become clear next year. Then the milk money regulations must also be re-evaluated. The central element promises to be again the guaranteed price. The guaranteed price sets ambitious goals (because 'above average milk price'), but despite an adjustment to the formula two years ago, there are many signals that the guaranteed price still weighs heavily on the company. In other words: that guaranteed price still seems on the expensive side for the FrieslandCampina company.
Business update with windfall
During the Members' Council meeting, a business update was given by CEO Hein Schumacher, who had recently received a contract extension. This also concerned possible adjustments in business operations (for example with regard to infant nutrition), but as far as was announced, not about resolute choices. For example, not to do anything about the overcapacity that FrieslandCampina is facing, according to Schumacher.
However, a small windfall was announced. Financial CEO Hans Janssen reported a release of €50 million in pension liabilities. That money is added to the profit and loss account. This is extra nice after the payment of €88 million in old pension obligations that was necessary earlier this year.
Wout Dekker left prematurely in fourth
On the sidelines of the meeting, the departure of the long-time very influential commissioner Wout Dekker was also announced. This departure is premature and unplanned, because according to the 2020 annual report, Dekker was reappointed for a second four-year term at the end of 2019. Dekker was, among other things, chairman of the remuneration and appointment committee, together with directors Frans Keurentjes and Erwin Wunnekink, who departed earlier this year. Dekker resigned on December 14. The Brabant livestock farmer Frans van den Hurk also left as commissioner, but he did so on his own initiative, because he felt that too little had changed. The company declined to comment on the event. A successor has yet to be found.