The closure of the 40-year-old factory shows how the production model of the dairy sector in Spain, in particular, the French multinational company Danone, is being transformed. The company announced the “closure of operations” of its Salas plant in Asturias. He avoids talking about the closure, even if it ends the production of one of Spain’s four dairy factories, which employs 80 workers in a predominantly rural area where there are not many industrial alternatives.
“They proposed to abolish the ERE (Employment Rules File) by the end of the year,” explains elDiario.es Juan Carlos García, secretary of the workers’ council and representative of the leftist trade union Corriente. “The rationale they give us is performance reasons, falling sales and very high production costs. They’re going to move production to France.”
In Spain, together with Asturias, the company has three other dairy production centers in Madrid, Valencia and Catalonia; in addition to three mineral water bottling plants, since Danone also owns water brands such as Lanjarón or Font Vella. It is Danone’s businesses that have suffered from the recent carrier strike.
The shutdown in Asturias did not take the workforce by surprise given that this is not the first time Danone has decided to close a plant in Spain or sell it to a competitor. In 2014, it handed over its Tenerife plant to Schreiber Foods, which specializes in “white label” supermarkets and hypermarkets. A year earlier, it closed its plant in Seville and moved production to Madrid and Valencia.
In Asturias, the French giant has been producing cheese and desserts for decades. For example, Danonino, the old “petit suisse”. “At the end of last year, there was a project that we could do ourselves, but it went to Madrid. We told the company they gave us a lanyard and they said they didn’t. Now look,” says Juan Carlos Garcia.
At the same time, in addition, the representative of the works council deepens that the entire production of Danone in Salas cannot be transferred to other plants of the subsidiary. “In Spain, such production is not possible, because we have processes that no one else has,” he suggests. “They’re taking him out.”
The process of “rationalization”
The company is not talking about industrial rethinking, although it is reducing the network of factories. “In recent years, a commitment has been made to keep production in Spain,” says a spokesman for the company. Danone sees the end of operations as “a process of rationalization, given the need to adapt to current and future consumer trends while at the same time ensuring the efficiency of manufacturing operations in order to continue to build the future of brands and strengthen their competitiveness.
“Danone has a historical presence in Spain and this is a strategic market for the company. The company remains committed to the territory, so it will maintain relationships with local dairy producers to continue supplying the company’s other production centers,” he adds.
The multinational corporation assures that these conversations “begin a process of dialogue in which the company will work together with the legal representation of workers to offer the best possible solutions and try to reach an agreement that satisfies the interests of all parties.”
What the staff is looking for is “the continuity of the factory, whether with Danone or with a different owner,” explains Juan Carlos Garcia. The Government of the Principality is also asking for continuity and urging Danone to lift the closure. Otherwise, the alternative goes through the search for a buyer who maintains activity. The option the company is open to. In addition, as indicated by the Ministry of Industry of Asturias, mediation by the state executive to avoid the closure of the plant, which damages the rural environment.
The Government of Asturias asks Danone to sit down at the negotiating table and explain the reasons why it has decided to withdraw from industrial activities in the Principality. Its president, Adrian Barbon, has criticized the company for seeking to “cut costs by laying off workers” and describes the move as “business greed” in statements compiled by La Voz de Asturias.
For the Danone group, Spain represents 4% of the income of the multinational corporation. Worldwide sales, which in 2021 reached 24,281 million euros.
The subsidiary has not yet submitted its evolution to the Trade Register for the last year, but it does have data for 2020. In the year of the greatest impact of the pandemic, sales of the Spanish subsidiary increased by 3% to 789.7 million euros. And it was profitable, although less than in the previous exercise. According to Cinco Días, Danone Spain earned €91 million in 2020, down 7.6% year-on-year, while operating expenses rose 8%, with compensation and pre-pension expenses up 3.8%. .
A subsidiary of Catalan origin and a company with fewer factories.
Danone is a French multinational company, but its seed is in Barcelona. There, in 1919, Isaac Carasso founded a company, for the name of which he took as a reference the nickname of his son Daniel: “Danone”. Years later, he moved to France and continued his business in the neighboring country. After the Civil War, Daniel Carasso joined three other Catalan families, Portabella, Fuster and Botton, and together they created a subsidiary. In other words, local business went hand in hand with the French, albeit with a French company as the reference shareholder. In fact, until 2016, three Catalan families owned small shares in the capital of the Iberian business.
Now, the dairy giant is announcing a halt to operations in Spain, which, according to union sources, has not happened at centers in its country of origin. In 2014, for example, the closure of factories in Budapest, Hungary was announced; Casale Cremasco in Italy; and Hagenov in Germany. The reason, he explained at the time, was the progressive decline in sales in Europe over the past decade. In these cases, production was moved to other facilities in Belgium, Poland, Germany and France.
“Danone’s situation is linked to the previous crisis,” said Pedro Gutiérrez, CCOO’s representative at Danone. “They were making decisions in a market that consumes less dairy but more plant-based products.” “Since 2007, the group has concentrated its industrial volume. There were 21 factories and now there are 10, some closed and others sold,” says Gutiérrez, who recalls how other dairy companies have suffered in recent years, including brands like Yoplait or Clesa.
“Since the 1990s, we have increased our staff from 4,000 to 2,000 employees. There are functions that have been outsourced, such as sales or transportation,” a CCOO representative lists. It also indicates that in recent years Danone has invested in plants that are still in operation and that it has a policy of high quality for its products, the prices it pays farmers and that it has increased exports from Spanish production centers. to other countries, such as Actimel, which is produced in Valencia. “The factories are high-tech, robotic. This is an investment, but it requires fewer people,” he concludes.
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