Goodman Fielder to cut factories
Food producer Goodman Fielder plans to shrink its manufacturing footprint from 53 to 35 factories within the next few years, as it seeks to turnaround flagging earnings.
The NZX and ASX listed company has been hit by fierce competition and a shift to supermarket brands, with its largest division - baking - suffering in particular.
Chief executive Chris Delaney told investors at a presentation this morning it would cut its "least efficient" factories through divestments and closures.
The company wouldn't confirm which factories are likely to close though they will be in both New Zealand and Australia. It also wouldn't comment on prospective job losses.
It announced the sale of its Integro commercial oils division last week and is in the process of selling its NZ Milling business - which employs about 130 people and includes Champion flour mills in Christchurch and Mt Maunganui.
Delaney said it was on track to announce that sale "in the near future".
Chief financial officer Shane Gannon said it was reviewing a group of businesses, which together accounted for 35 per cent of the company's revenue but only 13 per cent of earnings before interest and tax.
There would be further sales, he said, but the company could not yet announce any details.
Pankaj Talwar, managing director of its bakery division - which produces Vogels and Freya breads - said it would reduce its product or "SKU" range to focus on core products.
The baking division had nine bakeries in New Zealand and 18 in Australia.
It had announced the closure of three bakeries in Australia in June and more would follow.
"We will have fewer, bigger and better bakeries with a strengthened manufacturing footprint in the long term."
Goodman Fielder had a 40 per cent share of the fresh bake bread market in New Zealand, and there was "a tremendous opportunity" for growth, he said.
Last month the company reported a net loss of A$146.9 million (NZ$190.6m) for the 12 months to June - an improvement on the previous year's $166.7m loss - and updated investors on its restructuring programme which aims to strip $100m from its cost base by 2015.
The $146.9m loss included $267.2m in pre-tax restructuring charges and writedowns on its Australian and New Zealand baking business and NZ home ingredients arm.
Baking division revenues dropped 4.3 per cent to A$979m in the year to June.