Goodman to close factories
Food producer Goodman Fielder will sell off or take the axe to about 18 of its 53 factories in Australia and New Zealand over the next three years.
The company, which produces breads, spreads, dressings, baking ingredients and dairy products, has about 2200 staff in New Zealand but has yet to detail how they will be affected.
FIRST Union spokesman Paul Watson said the news was unsettling for staff and Goodman should clarify which sites would be cut.
"We have had no consultation on this. This has probably given comfort to investors but it doesn't give much comfort to workers. They will be worrying, 'Is it us? Is it our site?'," he said.
Goodman Fielder is tightening its belt to reverse slipping sales from fierce competition in the food industry and a flight to cheaper supermarket brands, particularly in its bread baking division.
Chief executive Chris Delaney briefed investors yesterday on plans to generate A$100 million (NZ$128m) in annualised savings by the end of the 2015 financial year, including by shrinking its manufacturing footprint from 53 to 35 factories through closures and divestments.
Managing director of the bakery division, Pankaj Talwar, said Goodman would cut its product range and bakery network, which includes nine bakeries in New Zealand and about 18 in Australia.
"We will have fewer, bigger, better bakeries with a strengthened manufacturing footprint in the long term."
The company is also reviewing "a small number" of peripheral businesses with a view to selling them off.
Its New Zealand Milling business, which employs about 130 people and includes Champion flour mills in Christchurch and Mt Maunganui, is already on the block, and Delaney said it was on track to announce a sale shortly.
Chief financial officer Shane Gannon said businesses under review accounted for 35 per cent of revenue but only 13 per cent of earnings before interest and tax.
Goodman planned to increase ebit from its five core divisions - bakery, dairy, flour and cake mix, spreads, and dressings and mayonnaise - from 64 per cent of total ebit to over 85 per cent by 2015.
The company, which has already cut 600 jobs as part of its restructure, last month reported a net loss of A$146.9m for the 12 months to June - an improvement on the previous year's A$166.7m loss.
The loss included A$267.2m in pre-tax restructuring charges and write-downs on its Australian and New Zealand baking business and New Zealand home ingredients.
Talwar said Goodman held 40 per cent of the NZ$790m New Zealand fresh bake market.
It had launched a range of new bread products, including lower- carbohydrate Freya's Sandwich Thins - which was potentially a new bread category - and gluten- free Vogel's, he said. The company had invested A$15m in an artisan bread plant in Sydney.
Goodman's shares fell 4.5 per cent on the NZX yesterday to 64c. It did not declare a dividend with its full-year results but said yesterday it would revisit its dividend policy in February. Fairfax NZ
- © Fairfax NZ News
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