Nufarm announces job cuts
- From: Weekly Times Now
- March 18, 2014
NUFARM will expand its Victorian chemical manufacturing plant but close others in Western Australia and Queensland in a shake-up of its Australian operations.
Nufarm managing director Doug Rathbone announced the changes as part of a restructure which would lower the company’s cost base while focusing on the development of new products and customer service.
The restructure will see 105 jobs lost — or 15 per cent of its workforce — in all areas of the business except product development.
Six of its regional service centres will be closed and properties, which include the WA and Queensland factories, remediated and sold.
The restructure is expected to produce annualised cost savings of $13 million.
Remediation of land was expected to cost between $2 million and $3 million
Nufarm’s dominance in the Australian farm chemical market has been challenged in recent years by cheaper imported generic products, particularly from China.
The company’s share price has fallen from highs of about $17 in early 2008 to today’s opening price of $3.90.
“Australia is a very competitive market with relatively low barriers to entry,” Mr Rathbone said. “As we have seen in recent years, it is also a market which experiences significant swings in seasonal conditions and demand patterns.
“We need to ensure we have a flexible business that can more readily respond to variations in demand, while meeting our commitment to supply high quality products that provide cost-effective solutions to Australian growers.”
The company said challenging seasonal conditions — with big impacts on sales volumes and margins — had exposed a cost base that was high and relatively inflexible, coupled with inefficiencies in the supply chain and logistics in getting product to customers.
Nufarm had engaged consultants to challenge its thinking but had also sought feedback from its retail sales network and farmers.
The company said it had found strong support for its Nufarm and Crop Care farm chemical brands but there was price pressure from competitors’ generic products.
There was also concerns from its customers relating to the quality of imported products.
Nufarm said the restructure would see a reduction in management layers, speeding up decision making and being more responsive to customers’ needs.