Big changes at Vion follow ‘disappointing’ results

Food producer Vion has announced widespread job cuts on the Continent in the wake of disappointing financial results, but has yet to confirm its plans for the UK business.  

The company has announced that it will accelerate its long-term strategy plan, ‘Balancing the Future’, which covers the three home markets – Germany, the Netherlands and the UK – which was unveiled in 2010. The redundancies have been announced as a result of plants being closed and changes being made to back-office activities to streamline efficiencies. The company also said that products in the overall range that do not sufficiently match the strategy will be discontinued.

Vion said it was currently analysing the strategic options of its complex UK food business in detail, which it said “requires time and attention”, but the focus will be on improving efficiency, enhancing the company’s productivity and product quality, while lowering costs.

It has already identified most of the changes that will be implemented in the Netherlands and Germany, which it says will be carried out at an accelerated pace, according to each individual market. It has announced that around 630 jobs will be affected in the Netherlands and Germany, with production ceasing at Vion Druten in the Netherlands and changes to the Meat Encebe production and organisation, while around 290 staff will be affected by restructuring of sites in Germany.

CEO and chairman of the board Uwe Tillmann said: “The starting points of our strategic vision have been reconfirmed. Achieving sustainable partnership relationships with strategic customers continues to be of prime importance, both now and in the future. We continue to invest in these partnerships, as well as in product quality and effectiveness. The right balance and choices will determine our future success.

“We are further optimising our production, logistics, ICT and sales, thus also reducing costs. Unfortunately, this will not be possible without streamlining certain activities and making some redundancies. In the interest of our customers, our suppliers, and our employees, we will now, more than ever, be committed to added value and our credo ‘Passion for Better Food’.”

Vion reported poor results in 2011, with particular challenges from home markets, which is attributed to an imbalance in supply and demand, while the competitive market had made it difficult to pass on high input costs to the consumers. The company saw a 53% drop in operating results (EBITDA) to €90m, despite a 7% increase in turnover to €9.5bn. However, there was growing market demand for meat from the BRIC countries.

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