Nufarm Limited announced it proposes to make changes to its European manufacturing operations that, on completion, will permanently reduce the company's fixed cost base, improve working capital management, and support the growth of its European business.
The proposed changes, to be implemented over the next 18 months, involve the planned closure of a manufacturing facility in Botlek (The Netherlands) and efficiency programs that will reduce costs and increase capacity at manufacturing facilities in Wyke (England) and in Gaillon (France). On completion, the changes are estimated to result in annualized cost savings of at least €16 million ($23 million).
Nufarm's Group Executive of Operations, Elbert Prado, said the changes have been identified following a detailed review of the company's European manufacturing footprint and how it supports both regional growth plans and the requirements of the global business.
"These changes will result in a more efficient manufacturing base in Europe and will improve our competiveness on a global basis by reducing the unit cost of one of our most important herbicides – MCPA – as well as several other products that are produced in Europe and exported to other markets around the world.
"The changes will also reduce supply chain complexity, supporting our efforts to improve working capital efficiency across the group."
The proposed rationalization of manufacturing activity in Botlek involves a potential total head-count reduction of approximately 50 employees. A consultation process is now underway with relevant worker representative groups.
The Executive General Manager of Nufarm Europe, Hugo Schweers, said the commitment to increase capacity in Wyke and Gaillon will support strong growth of Nufarm's regional branded business over coming years.
"We will strengthen our capabilities and capacity in key product areas including insecticides and fungicides as we continue to expand our presence in markets across Europe."
Nufarm announced a re-organization of its Australian and New Zealand manufacturing footprint last year, with production activity undertaken at an existing six manufacturing sites to be consolidated at three of those sites.