AUSTRALIA'S biggest baker Goodman Fielder says it is on course to make $100 million in yearly savings by 2015.The hopes for the future came after the company revealed a net loss in the past financial year of $150 million.
Goodman Fielder managing director Chris Delaney said the company's business improvement program, Project Renaissance, was producing its targeted cost savings and operational efficiencies.
"We are right on time in delivering that $100 million, and we continue to be confident in our ability to deliver the full $100 million over the strategic plan,'' Mr Delaney told the comapny’s annual meeting today.
Goodman Fielder's loss was still a 12 per cent improvement on the previous year's loss of $166.7 million.
Goodman Fielder's brands include White Wings, Meadow Lea, Praise and Helga's.
Mr Delaney said Goodman Fielder and its retailer customers had agreed on price increases for its bakery and grocery products.
The company's priority for the current financial year was to cut costs further and improve reliability and quality in core categories.
Goodman Fielder was also looking for new revenue streams outside of supermarkets, including artisan bread (batards, baguettes, ciabattas and rolls) and food service channels such as restaurants, bakeries and hot bread shops.
Mr Delaney said Goodman Fielder's goal was to diversify its earnings and grow its business in the Pacific region and in Asia.
On the outlook for the current financial year, Mr Delaney said market conditions would remain challenging.
"Consumer confidence in our core markets of Australia/New Zealand remain subdued and lead to a continuation of a challenging pricing and competitive climate,'' he said.
The turnaround of Goodman Fielder's bakery business was also on schedule: factory closures were on time and the number of products had been reduced.
Mr Delaney said the company would continue to sell non-core assets and use the proceeds to reduce debt.
He said that given the fact that price increases in the bakery and grocery sectors would become effective in December, earnings would have a stronger weighting in the second half of the financial year.
Singapore-based Wilmar International has upped its stake in Australia's biggest agri-food company to 10 per cent but there is still no signs of a takeover bid for the company.
Goodman Fielder, a trans-Tasman food giant, shares the lion's share of the national bread, cake and biscuit market with George Weston Foods, already owned by UK company Associated British Foods.
George Weston and Goodman Fielder use about half a million tonnes of Australian premium grain between them each year out of a total domestic flour milling market of around two million tonnes.