Arla is selling more but must cut annual costs to
keep up with international competitors, says chief executive Peder Tuborgh. “Our turnover is growing, and
that growth will continue.
“We have a responsibility towards all our co-op owners and other dairy farmers, who invest their milk and their money in Arla, to make sure our turnover grows [much] faster than our costs.
“Our international competitors are able to turn ideas into action quicker than before so Arla needs a more simple and structured way of working,”
Arla will shed 250 admin jobs globally by late 2012, and will internally restructure 150 admin jobs. Management will keep looking to make administration even more efficient as the growth continues. And it will look for potential for “similar efficiency measures in the production chain.”
Arla says it aims to lead in the consolidation of the European dairy industry, attracting and retaining raw milk in adequate volumes. A prerequisite for this is to pay a competitive milk price to its co-op owners, says Tuborgh.
“It’s a long time since Arla has had the opportunity to exploit the synergies that always arise when two large companies – each with their integrated production and administration – join forces. Even the most recent mergers with Swedish Milko and German Hansa have not been large enough to trigger radical efficiency measures throughout the company. [We must] ensure Arla stays competitive by reducing costs and complexity....”
The co-op will offer support and career counselling to all affected employees.
“I know this is bad news for colleagues who may lose their jobs, and it is certainly no reflection on their performance. Each activity they have been responsible for makes sense when viewed separately, but we can’t afford everything,” says Tuborgh.
Arla employees worldwide were briefed earlier this month about the changes.
