Danone to set up regional centre in Budapest

A regional centre in Budapest will be responsible for operations in Hungary, the Czech Republic, Slovakia and Croatia in the new European organizational structure of French food group Danone. The company said it would adapt management and support functions to the new role of the Hungarian subsidiary as the centre of a regional unit. Manufacturing activities are not going to be affected by the changes.

At a meeting of trade unions on Tuesday in Geneva, Danone Group presented a detailed version of its European reorganization plan, which was first announced in December last year. The company is planning to implement the changes over two years. The aim of the plan is to restructure general and administrative costs to suit the recently changed market environment, saving some EUR 200 million in the process.

The key element of the project is to simplify and optimize Danone's operating costs, especially as concerns management and support functions, in all European countries including Hungary. Part of the plan is to axe 900 management and administrative jobs, or 10% of its middle management throughout Europe.

The new model presented in the plan lumps several countries together under a single regional management based on factors such as the size of the market, and the similarity of consumers and local cultures. Implementation of the project is hoped to result in significant savings, as well as recovery of Danone's competitive edge in Hungary as well as the other countries of the regional group, the company said in a statement on Wednesday. The changes are not only hoped to create a more efficient organizational structure, but also enable Danone to invest more in developing its products and brands. 

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