Weary Milcobel opts for merger in the end

Milcobel was formed in 2005 from the merger of Belgomilk and the Belgian Dairy Union (BZU), both also the result of a long series of mergers. The roots of the oldest cooperative, Sint Paulus in Langemark, go back to 1906.

Today, the site of that factory is home to Milcobel's largest mozzarella factory. With an annual capacity of over 65.000 tons, it's the largest mozzarella factory in the Benelux. Besides Langemark, Milcobel has two other locations where milk is received and processed into dairy: the cheese factory in Moorslede and the factory in Kallo, where powder is primarily produced. Until last year, Milcobel also had an ice cream division, but it was liquidated.

Long lasting
It's actually a miracle that Milcobel has remained independent so far. In 2013, when the first general manager, Patrick Buggenhout, was succeeded by Eddy de Mûelenaere, there was already a feeling that a partner was needed to survive amid the European merger frenzy in the dairy industry. Milcobel struggled with outdated production equipment, was late to automate and digitize, and wasn't paying the best milk price compared to its European competitors.

Still going at it for a while
De Mûelenaere set to work energetically, trying to modernize Milcobel wherever possible. The results don't always bear this out, as reorganizations are also expensive. After him, Milcobel seemed to be able to cope again for a while. Under his successor, Peter Koopmans, things seemed to be going reasonably well again, but this CEO was suddenly forced to step down due to a huge loss. Just like his successor, Nils van Dam, a few years later – who, remarkably, was not employed, but hired on a contract basis. Van Dam seemed willing to fight on for a while, but was suddenly gone as well. His successor, Peter Grugeon, has been at the helm since July 2024, but has primarily implemented a scaling-down plan.

Results did not follow growth
Although Milcobel experienced significant growth after the end of the milk quota, both in turnover and the number of liters of milk processed, results became more mixed. Turnover rose from over €900 million to €1,2 to €1,3 billion, and the number of liters of milk increased from 1,2 billion to 1,8 billion at the peak in 2020, but earnings lagged behind. From 2020 onward, the picture became downright erratic. That year, in addition to the aforementioned record amount of milk, a record loss of over €20,5 million was also recorded, while in 2021 the highest profit ever was achieved (almost €11 million). Unfortunately, it wasn't enough. Partly because 2023 was again a poor year (-€11,6 million), as was 2024 (-€6,2 million).

A-ware comes as a competitor
Worse for the members was the significant lag in milk prices. This became even more noticeable when the Dutch company A-ware entered the Belgian market and recruited farmers with a highly competitive milk price. When, in its wake, other Dutch dairy companies (including a returning FrieslandCampina) also entered the Belgian market, the battle became even tougher and more unequal for Milcobel.

Ysco for the thirst
Fortunately, Milcobel still had its ice cream subsidiary, Ysco, for a long time. This yielded excellent results for Milcobel, especially in recent years, helping to offset losses elsewhere in the company. In 2023, however, Milcobel decided to play this trump card and trade Ysco for a substantial cash sum. The debts were repaid, and the members received compensation, but this was essentially the prelude to the end.

Too many setbacks
Milcobel was no longer able to survive independently. Too much investment was required to continue independently, while the results from the existing operations were too low and the cash flow was essentially empty. There were also recurring, costly setbacks, such as cheese quality issues, software problems at a large distribution center that prevented customers from being supplied, and so on. It became too much. Milcobel needed a new home. FrieslandCampinu, primarily interested in the additional milk supply, offered this.