As a result of changing market conditions, Ausnutria is recalibrating its business strategy and the organization intends to reduce the production capacity of its location in Leeuwarden. This would result in the loss of approximately 60 jobs in Leeuwarden. Ausnutria announced this to its employees on October 31.
Ausnutria is a manufacturer of infant formula and China is its most important market. Demands have been declining for several years due to the COVID-19 pandemic, declining economic growth, a declining birth rate and increasing local competition. This has a direct effect on Ausnutria's results.
Reassessing strategy for production in the Netherlands
Against the backdrop of a downturn in the Chinese market, but encouraged by the growing demand for goat's milk formula in the rest of the global market, Ausnutria is working on greater direction and efficiency of its Dutch production organization.
“To remain competitive in this challenging market, we will, in the coming years, focus even more on quality, sustainability and process improvement, but we are also forced to implement cost savings. This has led to the decision to reduce our location in Leeuwarden from a 5-shift operation to a 3-shift operation,” says Harriet van Genne - Knape, Production Director, Ausnutria B.V.
Ausnutria will continue its research into cost savings in the near future. It is likely that further reorganization will have to take place.
Confidence in future
Despite the major challenges in China, Ausnutria achieved sales growth in markets outside China. Ausnutria's strong position in the goat milk category, the opportunities this product group offers and thus confidence in the future, are also the basis for sustainable investments. “The construction of Ausnutria's new drying tower for semi-finished infant formula in Heerenveen will be completed in early 2024. This facility will operate completely sustainably (gas-free, electric and without any nitrogen emissions). We continue to focus on high-quality goat milk products and related scientific research and product innovations,” said Bart van der Meer, interim CEO Ausnutria.
The consequences of the reorganization will be further determined in the coming months. All proposed decisions are subject to advice from the Works Council. “We believe it is important to come up with a thorough social plan for our employees, in close consultation with the central works council and the trade unions. This will have our full attention in the coming period,” says Linsey Nijhuis–Pierik, HR Director, Ausnutria B.V.