Dutch giant stumbles

Friesland Coberco, the giant Dutch co-operative, has announced a 38% drop in its net profit for 1999 to 33.6 million Euros. The Belgian dioxin crisis and low selling prices for powdered milk, powdered whey, butter and cheese are blamed for the poor results.
Operating profit was 42 million Euros lower than in 1998, amounting to 87 million Euros, but branded products did well. A number of consol- idations also boosted net sales, which rose by 2.8% to 3.7 billion Euros.
The company anticipates an improvement in its market position over the next 12 months and expects sales of branded goods to retain their upward trend. However, future developments in market prices will dictate the performance of generic products in the year ahead.
The economic situation in Russia and South America and the consequent collapse of exports to these countries have led to a plentiful supply of dairy products within the European Union and concomitant low prices.
Borculo Domo Ingredients, Frico Cheese and Friesland Coberco Butter Products in particular are largely dependent upon generic products.
Nevertheless, synergy benefits from the efficiency measures introduced at the time of the 1997 merger continue to be felt and the company continues to strive to meet a net income target of 75 million Euros for 2000.