December 21, 2020

 

FrieslandCampina's Members' Council approves amendments to cooperative governance

 

 

FrieslandCampina's Members' Council of Zuivelcoöperatie FrieslandCampina UA has approved several amendments to cooperative governance, the dairy cooperative announced this month.

 

Furthermore, the Members' Council provided direction for the development of a future-proof member financing system. It was also updated on the acceleration of a transformation effort which was recently announced by the company.

 

The amendments are aimed at further increasing the involvement of members and district council members in the decision-making process, thereby bolstering support.

 

Among the changes, the number of districts will be reduced from 21 to 14 to continue improving the effectiveness and agility of FrieslandCampina. In line with this, the number of Members' Council members is to be reduced from 210 to 140 by way of a transitional arrangement.

 

In addition, four clusters will be formed within the Members' Council. These clusters are Day-to-day Management, Cooperative Values, Animals and Nature, and Member Commitment and Member Engagement. Each cluster will include several district council members from each district.

 

Members' Council members also provided direction for the development of a future-proof member financing system during the council's meeting on December 15. The link between quantity of milk supplied and capital to be invested, for example, is an important element of a new system for the Members' Council.

 

The potential setup for the future member financing system will be fleshed out over the first few months of 2021 to enable a substantiated proposal to be shared with the members at a spring members' meeting, FrieslandCampina said in its press releases.

 

It added: "We envisage that decisions on the new member financing system will be made by the time of the Members' Council meeting of June 2021 to enable the new system to be introduced from 2022 onwards, depending on how the Members' Council votes."

 

FrieslandCampina CEO Hein Schumacher, CFO Jaska de Bakker and other senior managers also updated the Members' Council on the latest developments within the company.

 

They focused in particular on the acceleration of a transformation effort announced last November. The purpose of the transformation is to create a FrieslandCampina capable of operating successfully even in extremely challenging market conditions and  being able to pay member dairy farmers a competitive rate for their milk.

 

The transformation will see FrieslandCampina focusing on five priorities:

 

- Accelerating the implementation of the "Our Purpose, Our Plan" corporate strategy;

 

- Successfully implementing a new route to market for the infant nutrition business in Hong Kong/China;

 

- Optimising the organisation and thus structurally lowering costs;

 

- Strengthening the company's equity;

 

- Preserving and bolstering FrieslandCampina's prevailing corporate culture.

 

To optimise its business structure, improve focus and structurally reduce overhead costs, FrieslandCampina has announced that two new units are to be created in 2021. The first of these is FrieslandCampina Professional, which will be responsible for all of the company's high-value business-to-business (out-of-home and foodservice) activities.

 

The food and beverage activities of FrieslandCampina Ingredients will be transferred to FrieslandCampina Professional. A strategic partner will actively be sought for the animal food business of FrieslandCampina Ingredients.

 

Over the course of 2021, business group Dairy Essentials will be transformed into a specialised trading business called FrieslandCampina Trading. This unit will focus on profitable trade in bulk dairy products such as butter, cheese and milk powder.

 

Zijerveld Kaas in Bodegraven, the Netherlands, which currently falls under Dairy Essentials, will be merged with the company's other cheese activities in Consumer Dairy. The high-value business-to-business activities of Dairy Essentials' cheese, butter and milk powder will be transferred to FrieslandCampina Professional.

 

The aforementioned proposed changes to FrieslandCampina's business structure will result in the redundancy of 55 jobs in its business groups.

 

Finally, FrieslandCampina has also launched its revised sustainability strategy "Nourishing a better planet."

 

The organisation is keen to ensure that sustainability is embedded deeper in its brands and products.

 

- FrieslandCampina