Danisco Launches Restructuring Plan in Europe

A restructuring plan involving several Danisco sites in France, Germany, Holland and Denmark is being launched.

In France, Danisco plans to restructure at sites acquired with Rhodia Food in May 2004. The restructuring aims at enhancing Danisco´s production efficiency and to safeguard cost competitiveness of the xanthan and culture media businesses.

The planned French restructuring covers the discontinuation of dairy media production in Vinay to concentrate all Danisco´s European media production in Tønder, Denmark, as well as adjustment of the production structure at the xanthan plant in Melle.

´The restructuring in France is essential for Danisco´s competitiveness and to maintain its position on the global xanthan and media markets. A thorough analysis has been conducted with a view to creating the most efficient and financially viable operation for the future. As a result, the intention is to adapt the production structure in Melle and to guarantee European media production from Tønder, Denmark,´ states Ole Rasmussen, President, Danisco France SAS.

On the xanthan market, the excess of worldwide production capacity has significantly impacted the market price with a 40% drop over the last three to five years. This decrease has recently accelerated with the substantial entry of Chinese producers into most of the xanthan market segments. The plan to regain competitiveness at Melle includes a series of actions aimed at significantly reducing the production cost structure due to process adaptations and additional investments improving productivity.

The necessary restructuring plan will give rise to the shedding of 40.5 full-time positions in Melle, three full-time positions in Vinay and two full-time positions in Aubervilliers that relate to Danisco´s innovation activities dedicated to xanthan.

Danisco will take all necessary measures to provide alternative solutions for the affected employees. Therefore, several opportunities for internal relocation will be offered in France and abroad to limit the social impact of the restructuring plan to the widest extent possible. The actual terms and conditions of the relocations will be settled during negotiations with staff representatives over the coming months.

Outside France, the restructuring plan also affects the Dutch functional systems site, and, following the regrouping of all Innovation businesses, the sites at Brabrand (Denmark) and Niebüll (Germany). Its implementation would result in five job reductions in Niebüll, Germany, four job reductions at the innovation centre in Brabrand, and close to 20 job reductions in Zaandam, Holland.

Media consist of powder blends (milk protein, soy, glucose, etc.) formulated to provide the nutritional medium for lactic bacteria growth in milk and are produced through the mechanical mixing of nutrient ingredients. The customers are exclusively the dairy industry.

Xanthan gum is a texturant agent that has numerous uses in food and cosmetic products, among others. Within food applications, the main use of xanthan is as a stabilising agent in salad dressing, sauces, beverages, mayonnaise, ketchup, bakery products and dairy desserts.

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