June 21, 2012

DMK to close facilities

German dairy giant, DMK, will cease operations for two plants as part of cost-cutting measures, resulting from the merger that formed the company.

DMK, which was formed after the 2011 combination of German firms Nordmilch and Humana, is to shut a UHT milk factory in Strückhausen. Its Milchhof Magdeburg milk powder unit in the town of Magdeburg will also follow along.

The company wants to "optimise" its production network to "improve cost-effectiveness". Production changes will be made at ten of DMK's 23 sites by 2014. Up to 156 jobs from 5,700 could be lost.

Dr Dirk Gloy, DMK's production MD, said the project would benefit the company's suppliers, helping it to invest increasingly in innovation and using raw materials more effectively.

"The concept will save us millions in the medium term. We have to tap this potential for our milk producers and deliver it to the farms in the form of milk prices. Secondly, we expect better innovation management from the new structure. And thirdly, this way, we will extend our scope in the utilisation of raw materials, allowing us to redirect milk volumes from one large product group to another to optimise value added and respond to market fluctuations," he said.