September 4, 2013

FrieslandCampina approves US$323 million expansion in Borculo and Leeuwarden

Press release

FrieslandCampina Member Council has approved the construction of a new plant for infant and toddler nutrition and ingredients in Borculo, as well as the replacement and expansion of the processing capacity for evaporated milk products in Leeuwarden.

The plans, which were previously announced, require an investment of €135 million (US$178 million) in Borculo and €110 million (US$145 million) in Leeuwarden. These amounts are in addition to the total of €200 million (US$263 million) in investments FrieslandCampina committed to in the first half of 2013. With these expansion plans, the company is not only contributing to regional employment, but also to a further strengthening of the Netherlands' export position in dairy products.

The aim is to build a new plant in Borculo next to the existing site, complete with a spray-drying tower for the production of infant and toddler nutrition and ingredients.

The most important projects covered by those funds include the expansion of the production capacity for infant and toddler nutrition at FrieslandCampina Domo in Borculo worth €40 million (US$53 million), the improvement of the production location in Samrong, Thailand amounting to €13 million (US$17 million) and the expansion of the production capacity of FrieslandCampina Butter in Den Bosch worth €7 million (US$9 million). The remaining investments involve renovations and expansions of several production locations. All these plans are to be realised over the coming years.

A number of expansion projects were completed in the first half of this year. These included doubling the cheese production capacity at FrieslandCampina Cheese in Workum to 120,000 tonnes per year. In addition, the production location adjacent to FrieslandCampina Domo was expanded to enable processing of whey, a by-product of cheese production.

A new sustainable installation was added, which concentrates whey into powder, an important ingredient for infant and toddler nutrition, among other applications. And July 2013 saw completion of the FrieslandCampina Innovation Centre in Wageningen, which includes research facilities, laboratories, a pilot plant and offices. The Innovation Centre will be officially opened in October 2013.

The expansions are part of the company's route2020 growth strategy. The aim of the investments is to enable FrieslandCampina to profit from the increasing demand for products with added-value and to have the capacity to process the expected increased quantity of milk supplied by member dairy farmers due to the termination of the EU milk quota in 2015. Last year, it invested a total of €423 million (US$557 million) to expand its processing capacity.

FrieslandCampina is working towards efficient and sustainable production chains, from sustainable dairy farming and the purchase of sustainable raw materials through to reduced energy and water consumption and waste water discharge. The company is committed to climate-neutral growth.