Ann: GENERAL: NFF: Restructuring of North American Manufacturing Footprint

• Release Date: 24/11/15 10:37
• Summary: GENERAL: NFF: Restructuring of North American Manufacturing Footprint
• Price Sensitive: No
• Download Document  4.79KB

					NFF
24/11/2015 10:37
GENERAL
PRICE SENSITIVE
REL: 1037 HRS Nufarm Finance (NZ) Limited

GENERAL: NFF: Restructuring of North American Manufacturing Footprint

Further savings to be realised from ongoing performance improvement program

Nufarm Limited today announced its decision to close its manufacturing
operations at Calgary in Canada as part of its plan to build a more
responsive, flexible and cost effective structure for the North American
region via its facilities in the Chicago area.

The current Canadian distribution locations that serve customers directly
will remain, with increased capacity to ensure customers will be serviced
with the same or better response times. All sales, marketing, and
customer-facing operations in Canada remain, further emphasising the
company's commitment to meeting customer needs.

Nufarm's Group Executive Operations, Elbert Prado, said, "The decision to
close the Calgary manufacturing facility is part of the company's commitment
to improve the performance of its operations.

"As with the manufacturing changes we are making in some of our other
regions, this decision will allow us to increase flexibility, reduce
complexity, and more efficiently utilise our facilities.

"We have invested to improve capacity of the overall North American
manufacturing base, with a new state of the art seed treatment operation and
full retooling of the herbicide facility in Chicago. These new facilities
will provide greater capacity and support to ensure that we can respond
quickly to the needs of our Canadian customers. This proved a more efficient
approach than expansion of the Calgary site. "

The General Manager for North America, Brendan Deck, said, "We are committed
to continuing to support and grow our presence regionally through the
delivery of quality products and services that meet the needs of local
farmers. The Canadian market is important for Nufarm and we see significant
potential growth opportunities. We're also confident that we can maintain or
improve our level of service to our customers through increased capacity at
our Chicago sites."

"We will also have an improved ability to share innovations in formulation
design and other customer solutions as we operate as a more closely
integrated North American team, always ensuring that we continue to develop
products in Canada for Canadian farmers."

 Nufarm's Managing Director and CEO, Greg Hunt, said the changes are a
further step in the company's ongoing performance improvement program.

"The savings announced today are part of the performance improvement program
we announced in February, in which we committed to delivering a net EBIT
(earnings before interest and taxes) benefit of $116 million by fiscal year
2018. This reflects our commitment to continually assess and review our
operations globally to improve our business. We are currently reviewing every
part of our business, including our procurement and supply chain.

"Our aim is to be as efficient, effective and responsive as we possibly can
be in meeting shareholder and customer needs," Mr Hunt said.

The rationalisation of the company's Calgary manufacturing activities is
expected to result in permanent annualised EBIT improvement of $3.3 million.
Nufarm will record one-off restructuring costs in the current financial year
of $9.5 million, of which $3.7 million is a non-cash component.

The North American operational changes are expected to be implemented by June
next year, with the savings fully realised in Nufarm's 2017 financial year.
The transfer of manufacturing activities from Calgary to Chicago Heights will
be implemented over the next nine months with approximately 18 full-time and
30 seasonal manufacturing employees affected by the changes.

Nufarm also took the opportunity to advise that it is progressing well
against its previously announced global manufacturing efficiency programs,
including the footprint rationalisation of its ANZ and Europe regions.

The Welshpool site in Western Australia is now closed and in the process of
being sold, while the manufacturing facilities at Otahuhu (New Zealand),
Lytton (Queensland) and Botlek (The Netherlands) are in the process of being
shutdown, decommissioned and remediated in preparation for the sale or return
of assets.

The company's Pipe Road Laverton plant in Australia is also in the process of
finalising a reorganisation of its manufacturing workforce following an
extensive review of operations as part of a site-wide manufacturing
performance improvement program. The reorganisation, which will result in $5
to 8 million in annualised savings, is aimed at ensuring its regional
businesses will be more competitive, responsive and efficient.

-- end --

Further information: Mark Keating
GM Investor Relations
 [email protected]
   * (61 3) 9282 1004
End CA:00273974 For:NFF    Type:GENERAL    Time:2015-11-24 10:37:44