September 5, 2012

Goodman Fielder to shut facilities in Australia and New Zealand

Goodman Fielder, plans to cease operations for about 15 facilities across Australia and New Zealand over the next three years, as part of efforts to save US$102.56 million in operational costs.

In an investor briefing, chief executive, Chris Delaney, said that the company would lower its manufacturing capabilities from the current 53 plants to less than 35 plants by June 2015.

The factory closures, which will primarily affect the bakery division, are expected to boost the company's manufacturing capacity from 60% to 85%.

Goodman Fielder has also initiated a review of underperforming business and plans to divest them, a move which is expected to improve the company's earnings margins.

The profitability of remaining businesses will be increased by eliminating underperforming product lines - the company has already cut nearly 150 lines from its Australian bakery division.

The latest move comes after Goodman Fielder reported a net loss of US$150.66 million for 12 months to June 2012 - an improvement from US$170.97 million loss in 2011.

The restructuring plan includes achieving sales growth by doubling the marketing investment, of which, 90% will be allocated to five product categories - bakery, dairy, flour and cake mix, spreads and dressings and mayonnaise.