DMK CEO not happy with 2016
Promising to make DMK future-proof, DMK CEO Ingo Müller says, “The DMK Group is moving on,” at a recent press conference in Bremen. “With an extensive structural programme, we are committed. We have learned from our mistakes.”
The goals of Germany’s largest dairy cooperative are to regain trust and generate a competitive milk allowance for all cooperative milk suppliers. Müller is not satisfied with the year 2016, noting, “We have clearly missed our most important goal — to pay a competitive milk price. There is nothing good to say about this fact.”
In 2016 sales were up from €4.6 to €5.1 billion, resulting in a yearly net profit of €13.5 million. However, sales growth of 11% was achieved mainly due to the full consolidation of Dutch operation DOC Kaas. The year 2016 brought the dairy price down, as a result of a crisis in the global dairy markets. This development was reinforced by the inadequate company performance of the DMK Group. As a result, average milk money for the producers was €0.25 per kilogram, below the German average of €0.267 per kg.
“The milk money did not correspond to what the members of our cooperative as owners expected – neither absolutely nor compared to the competition,” Müller states.
“For 2017 the signals from the milk markets are positive. That is why we can raise the milk money to €0.36 in July. Our goal is to pay our members a competitive milk price. According to the resolution of the shareholder’s meeting we are paying a dividend of 4% for 2016, despite the current low interest rate on the members’ paid assets,” he notes.
Reorientation has been in operation since March 2017. It has four objectives: a tighter organisation, better raw material planning, a focused portfolio and an optimised spending structure.
“The change processes are sometimes painful, but the first key figures from 2017 show that we are on the right path”, Müller says.
In other news, DMK in Germany plans to shutter its Rimbeck and Bad Bibra plants. It is a response to reduced amounts of milk. Up to 1.7 billion kilograms of milk will be cancelled over the next two years. For the same reason at the Nordhackstedt site in Schleswig-Holstein will stop the preparation and slicing of cheese.
The Rimbeck and Bad Bibra closures will at the earliest take place in the first quarter of 2018, and in Nordhackstedt at the earliest in mid-2018.
Another site, a contract with Rotkäppchen Peter Jülich for soft cheese production at Bergen, is being discontinued as analysis has shown that even high investments in a modernisation of the plant would not lead to competitive production costs. Production of Rügener Badejunge will be relocated to DMK’s Altenburg site. The Bergen plant produces butter, camembert and whey.
