Danone optimizes production capacities, closes 2 plants in Russia
As part of production optimization program, France-based Danone Group announced plans to rearrange its capacities in Siberia and Volga Region, Russia. This will lead to stopping production at Tomsk dairy plant and consolidating volumes at Kemerovo and Krasnoyarsk plants in Siberia, as well as gradual reallocation of production from Cheboksary dairy plant to Samara, Saransk and Kazan Plants in Volga.
The main reasons behind this decision are significant depreciation of sites, low profitability and decrease of sales volume required to upgrade these facilities as per new criteria of quality and environmental safety assurance.
The optimization affects about 300 employees.
In 2012, Danone announced its intention to invest $700 million through 2017 to upgrade its production sites in Russia. Although the dairy plants in Siberia and Volga have already extended their assortment range, significantly increased production capacities and improved quality standards and food safety of finished products, the consolidation of production capacities aims to reinforce performance of the above sites.
Production at Tomsk and Cheboksary plants will be stopped by the end of Q1 2016. This will not affect volumes of raw milk purchased and volumes of finished products supplied to the neighboring regions and within the regions of the plants’ location. The raw milk supply, as well as production capacities, will be allocated among other plants in Siberia and Volga.