FSF
16/07/2015 12:49
GENERAL
PRICE SENSITIVE
REL: 1249 HRS Fonterra Shareholders' Fund (NS)
GENERAL: FSF: Fonterra shares first results of business review
16 JULY 2015
Fonterra shares first results of business review
Fonterra Co-operative Group Limited has provided a further update on its
business review.
Chief Executive Theo Spierings said the Co-operative's leadership was
developing initiatives to deliver value right across the organisation.
"The key aims of the review are to ensure that the Co-operative is best
placed to successfully deliver its strategy, increase focus on generating
cash flow, and implement specific, sustainable measures for enhancing
efficiency.
"A simple example already identified by our supply chain team is a logistics
solution that increases the utilisation of export containers leaving our
distribution centres, saving up to $5 million a year," said Mr Spierings.
The review includes measures to improve profitability at Fonterra's
Australian business as well as a series of additional measures to remove
barriers across the organisation to enable it to unlock more value.
Fonterra confirmed that it had completed consultation with its central
procurement, finance, information services, human resources, strategy and
legal teams. As a result, 523 roles will be disestablished at a one-off cost
of $12 - $15 million. At that level the Co-operative expected on-going
payroll savings of approximately $55 - $60 million per annum.
Mr Spierings said the news had been unsettling for the people affected but
the Co-operative had to change if it was to remain strongly competitive in
today's global dairy market.
"Reducing the number of roles in our business isn't about individual
competency; it is about continually improving the way we deliver
performance."
Fonterra said that the affected staff would begin to leave the Co-operative
in September.
The Co-operative has also informed staff that on 5 August it will begin
consultation on new business structures with its people in administration
roles, sales - ingredients, consumer, marketing, research and development,
communications, health and safety, food safety and quality, group resilience
and risk, property, procurement and change management.
Further updates will be provided in due course.
-ENDS-
For further information contact:
Abhy Maharaj
Director Equity Markets
Phone: +64 21 879 458
End CA:00267079 For:FSF Type:GENERAL Time:2015-07-16 12:49:07
