The Greek dairy company Fage wants to build a large factory on the Riegmeer business park near Hoogeveen. However, the delivery has been postponed again. The yoghurt producer has been looking for expansion in Europe for about seven years.
Yoghurts are popular, in all shapes and sizes. After milk, it is the most sold dairy product in our country. But there are also many enthusiasts of the slightly sour, white stuff in many other countries. European yoghurt production now exceeds 11 billion kilos.
Competition
A market in which competition is fierce and margins are under considerable pressure. The Greek yoghurt producer Fage has seen its profit shrink considerably in recent years, partly due to the high purchase prices for raw milk. To strengthen its position in the growing yogurt market in Europe, the family business wants to increase capacity and turnover.
In 2021, Fage – which means ‘food’ in Greek – dropped his eye on a location in the municipality of Hoogeveen. Business park Riegmeer, to be precise. For a long time, this former agricultural area of almost 70 hectares on the edge of Hollandscheveld was mainly in the news because of losses of millions, write-offs and objection procedures up to the Council of State.
But for the past two years, the municipal problem child has had the wind at its back from an economic point of view. Fieten Olie from Hollandscheveld will settle there, Tennet/Rendo want to build a transformer station there (on the site of the much-discussed pedunculate oak ) and the Greek dairy company Fage has taken out an option on a 15-hectare plot for a ‘hypermodern and sustainable dairy’.
The latter involves large numbers: an investment of more than 150 million euros, a production capacity of up to 80,000 tons per year and the creation of about 250 new jobs.
Luxembourg
However, Fage’s choice for Hoogeveen two years ago was not born out of luxury. For years, the company has been trying to set up a yoghurt factory in Luxembourg. The first plans date back to 2016.
But the dairy giant met increasing headwinds, not only from environmental activists and residents, but also from the Bettembourg city council, which had to locate the factory on a nearby industrial estate. There was surprise and dissatisfaction about the enormous amounts of drinking water required, the purification of waste water, the plastic packaging and the food waste.
The economic and financial magazine Paper jam noted that ‘two tons of yogurt must be produced and destroyed every day, simply because this amount of yogurt must be used for a so-called stress test.’ All this raised the question of how sustainable and ecologically responsible this company actually is.
Spicy
There was another, spicy issue playing in the background. Fage was suspected of 53 million euros to two fictitious consultancy firms in Luxembourg. According to Paper jam these agencies, which do not employ any staff, were connected to the family behind Fage. Justice also delved into the alleged ‘ghost consultants’, but as far as is known, no further steps were taken.
The delay and opposition in Luxembourg, where Fage has been headquartered since 2012, were reason for the company to pull the plug on the ambitious factory project in September 2020. Also to prevent further reputational damage.
Athanassios’ shop
Athanassios Filippou opened in 1926 a small shop with dairy products in Athens. That was a success. The homemade, creamy yogurt was very popular. In the 1960s, his sons founded Kyriakos and Ioannis Filippou Dairy Fage op.
In the following decades, the company grew into an international enterprise with production facilities in Metamorfosi (Greece) and Johnstown, New York (USA). Fage now sells its products in more than 40 countries.
The company distributes its products to approximately 300 supermarket chains and approximately 50,000 stores, primarily in the United States and Europe. It also sells to bakeries, patisseries, dairies and smaller convenience stores. At the end of last year, 795 people worked at the yogurt company.
Sufficient milk
In the renewed search for a suitable location, the Greeks ended up in Hoogeveen, on Riegmeer. In the press, the company pointed to the good northern infrastructure, the export opportunities and the presence of enough milk to fill the factory. Not a word was said about the years of effort to settle in Luxembourg.
The dairy giant is going full steam ahead for Hoogeveen, supported by the municipality, province, investment company, water board, water supply company and energy company. Every effort is made to keep this ‘big fish’, which normally presents itself once every five to ten years, on the hook.
Alderman Jan Zwiers van Hoogeveen and deputy Henk Brink have already drummed up the economic importance and the extra employment. “Fage is a wonderful company and a valuable addition to the dairy cluster in Hoogeveen,” said Brink.
Delay
But despite all the positivism, the protagonist has recently adjusted the schedule for the second time. The factory that Fage wants will not be operational in 2024, as originally planned, and also not in 2025. The annual report for 2022 now states that the first half of 2026 is targeted. The reason for the delay is not stated.
In any case, the full electricity grid and capacity shortage in the Hoogeveen region have no effect on the Fage location. ‘This connection with the required capacity has been requested and confirmed in good time,’ wrote B and W to the council last month.
To make it possible for Fage to establish itself on Riegmeer, a new eight-kilometre pressure pipeline to the sewage treatment plant in Echten must be constructed. The current municipal sewer system cannot handle the capacity and discharge into the Hoogeveensche Vaart is undesirable.
Business park Buitenvaart, the village of Hollandscheveld and DOC Kaas will also be connected to the new pressure pipeline. The construction of a new sewer system will cost 11.8 million euros. The costs are covered by Fage’s sewage charges and the 3 percent increase in municipal sewage rates.
Permit
The Provincial Executive of Drenthe wants to grant the permit ‘subject to conditions’. For example, the province wants the company to draw up an odor management plan with additional measures to prevent possible odor nuisance for the environment.
At the location on the Hollandschedijk, the factory wants to install two large ammonia cooling installations of 4100 kilos and 5100 kilos. There will also be an above-ground storage tank for more than 1000 liters of nitric acid. Both are regarded as hazardous substances and are not permitted on Riegmeer.
Exception
However, an exception can be made if it can be demonstrated that the arrival of such installations entails little or no risk. According to the province of Drenthe, sufficient research has been done into this.
Fage wants to commission the new factory in two phases. Initially, production will be around 40,000 tons of yoghurt. Once the factory is fully operational, production will double to 80,000 tons per year.
Last year during a committee meeting in the Drenthe parliament, critical voices were heard about the arrival of the yogurt factory in Hoogeveen. For example, the SP is concerned about the amount of drinking water that the Fage consumes daily and the manufacturer’s nitrogen emissions.
SP member of parliament Greetje Dikkers Greek pointed out that the Greek company has no quality marks when it comes to animal welfare, environmental awareness and climate. The party received support from the PvdA. The Party for the Animals (PvdD) was also critical of Fage’s arrival.
The draft decision for the environmental permit for Fage is available for inspection until 18 May.
Whether the yogurt factory will survive in Hoogeveen after the sof in Luxembourg, the future will tell. From an administrative point of view, there seems to be more unity and commitment to making the establishment a success in Drenthe than was the case in and around Bettembourg.
But until the opening in the first half of 2026, a lot of water still has to flow through the sea.