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01.02.2021

Abroad, there are opportunities

Much is happening around the world. With the International Business Unit, DMK COO Michael Feller is finding valuable contacts and expanding the business in countries such as Russia, Jordan and China.

Why does international business matter so much to DMK?

In our Vision 2030, we said we want to pursue clearly-defined, value-enhancing growth in international markets. What does that mean? It means we don’t want to just sell products indiscriminately for any price – we want to target markets that enable us to create added value. That means we have found another pillar as a dairy – and so for our farmers – to be profitable. Markets such as Russia, the Netherlands or the Dominican Republic offer an incredible amount of potential.

Can you give us an example of that?

Years ago, Russia closed its market to dairies from Western European, so no one can sell cheese there. So we built a factory in Bobrov a few years ago, where we make block, cylindrical and spherical cheeses, along with cheese for cooking. Over the past three years, the factory reached its limits and now we are building a second plant nearby, where we mainly use machines from a German DMK dairy that closed. The building is finished, the first tanks are ready and commercial production is due to start in April 2021. We’re doing that because business in Russia is highly profitable and we can expand. I also know about that and am familiar with the local market because I spent seven years work-ing in Russia for Friesland-Campina.

What advantages are there for being based abroad?

When we manufacture locally, we save customs or import duties and also, our value chain is much closer to the market. Of course, we face tough competition – there’s no country where we’re alone on the market. ARLA or Friesland-Campina have been in many countries for 50 years and more, with regional factories and brands. We can’t catch up with them but there are plenty of niches for our cheese products.

Michael Feller, 61, is Chief Operating Officer DMK International. He is responsible for selling finished dairy products in international markets outside Europe. Before he joined DMK in 2012, he was Head of Germany at Friesland-Campina, and spent seven years in Moscow for the company.

The cheese market is also growing in China ...

Business with UHT milk is particularly brisk in China and we have a commercial site there, too. German milk and dairy products are seen as being of particu-larly good quality and demand for them is growing. Right now, our business with Oldenburger Mozzarella is growing as we’re supplying hotels, restaurants, canteens, hospitals and public authorities.But we’re also present in the Dominican Republic, and we’re profitable in retail and with our Food Service. We’ve built up the business from zero to 2,000 tons of Oldenburger over the past four years. Abroad, people associate our Oldenburger, Rose and Uniekaas traditional brands with high quality and good flavour.

How are synergies developing with the Netherlands?

The Maxima project combines several Dutch activities in the International Business Unit, Private Label, Brand and Industry to create better synergies. One challenge is that we’re introducing SAP in the different departments. And of course synergies are always unsettling, but the mood in the two countries is basically positive. You can really see the benefits of cooperation between the Dutch and German colleagues in many areas, and the knowledge exchange is really bearing fruit, it’s exciting. The Dutch have a very high level of expertise in making naturally matured cheese to varying degrees of maturity. Some cheeses there mature for a year, while in Germany, we only sell young cheese.

Alongside Oldenburger and Rose, Uniekaas is among the most popular types of cheese abroad. The Netherlands’ long cheese-making tradition makes for excellent quality and taste.

Trusted Dutch brand

Why is it so important for DMK and its members that we do business abroad?

Most milk produced in Europe has to be exported because local markets are saturated, while sales abroad are still growing. Countries such as Oman or Saudi Arabia won’t ever have comparable dairy industries as they don’t have enough water or feed, the climate isn’t suitable and they don’t have advanced dairy industry knowledge or expertise.

How do manage international partnerships when travel is practically impossible?

We manage with telephone and video meetings, although that isn’t always ideal. In many cultures, negotiating partners traditionally meet in person and get to know each other – and only then get down to business. When I’m far away, I can’t see gestures or facial expressions, and I can’t tell if someone twitches, or turns away, or smiles, or raises their eyebrows – but I need that information so I can respond. Video meetings help enormously, but they can never replace meeting in person and talking together to create trust. We’re also missing the trade fairs – Bakery in China, or Sial in Paris. They’re great platforms to meet new customers and traders. Nonetheless, internationally, things are going well for DMK.

Do you miss that contact?

I miss it and it’s important. But many have romantic images of travel. It’s necessary but it’s not everyone’s thing, to be travelling all the time. It is mine though!

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