Crop protection group Nufarm plans to cut 105 jobs as part of a $13 million annual cost-saving bid that will see the closure of its Lytton and Welshpool manufacturing plants and several regional services centres over the next two years.
Two consecutive hot, dry seasons in Australia have hit Nufarm’s sales and wreaked havoc on earnings as margins are crimped by the high fixed cost base of Nufarm’s manufacturing, logistics and warehousing footprint.
In a conference call on Tuesday, the company said that 105 of 673 staff will lose their jobs as part of the restructure.
Long-serving Nufarm managing director Doug Rathbone said the new structure places stronger focus on product innovation and portfolio development and will improve utilisation of assets.
The loss of capacity from the phase-out closure of the Welshpool plant in Western Australia and the Lytton facility in Queensland will be offset by the expansion manufacturing facilities in Victoria.
Nufarm, which expects to incur one-off restructuring costs of up to $39 million, of which $28 million will be non-cash.
“This is about improving the business and more effectively meeting the needs of our customers with an efficient and cost-effective structure,” Mr Rathbone said in a statement.
Nufarm will reorganise its Australian regional service centre and warehouse network, closing six facilities but retaining key centre in major cropping regions.
There will be an overhaul of administration and support roles and an unspecified headcount reduction.
A review of Nufarm’s New Zealand operations is ongoing.
Last year, Nufarm’s Australian revenue plunged 14 per cent to $604.4 million while earnings dived 67 per cent to $35.4 million.
Nufarm subsequently called in Deloitte and specialist manufacturing and logistics consultancy D.Betts to help with a review of the Australian and New Zealand operations.
The company reports interim earnings on March 26.