Nufarm to Close Manufacturing Plants, Service Centers, Cut Jobs in Australia

Jackie Pucci Posted by Jackie Pucci|18 March 2014
“This is about improving the business and more effectively meeting the needs of our customers with an efficient and cost-effective structure." -Doug Rathbone, Nufarm CEO

“This is about improving the business and more effectively meeting the needs of our customers with an efficient and cost-effective structure.” -Doug Rathbone, Nufarm CEO

Nufarm Limited announced it will close two manufacturing facilities and six regional service centers in Australia and cut jobs in a cost-cutting move aimed at saving the struggling company $13 million a year.

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Nufarm Managing Director Doug Rathbone said the new structure places a “stronger focus on product innovation and portfolio development,” as well as improving utilization of its manufacturing assets and efficiencies across logistics and supply chain areas.

Manufacturing facilities in Victoria will be expanded to take over production of those products currently manufactured at the sites to be closed (Welshpool and Lytton), Nufarm said.

The new manufacturing footprint will have the capacity to meet existing volume demand as well as meeting increased volume requirements in periods of higher demand, Nufarm said. The changes to be implemented over a two-year period are expected to result in annual cost savings of up to $13 million. One-off restructuring costs of up to $39 million will be booked in the current financial year, of which approximately $28 million will be a non-cash impact.

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Nufarm owns the majority of properties proposed for closure and said it will seek to maximize sale proceeds after site closures.

“We have a highly valued market leadership position in Australia – via our Nufarm and Crop Care businesses – and a key driver of the changes we are making is to ensure we continue to meet and exceed the product and service expectations of our customer base,” Rathbone said.

Details of the changes include:

  • Phased closure of Nufarm manufacturing sites in Welshpool (Western Australia) and in Lytton (Queensland);
  • Transfer of production activity for certain products to the existing main Laverton manufacturing facility in Victoria.
  • Redevelopment and expansion of a second existing manufacturing site at Laverton.
  • Reorganization of the group’s Australian regional service center and warehouse network, with key centers to be retained in major cropping regions and the closure of six facilities.
  • A new management structure and increased investment in product development and portfolio renewal.
  • A reorganization of various support and administration roles, with a resulting headcount reduction in those functions.

“The changes will enable us to be more responsive, more competitive and more focused on delivering innovative, high-quality products that continue to meet the needs of our customers,” Rathbone said.

The company also announced that a review is underway of its manufacturing operations in New Zealand. The New Zealand manufacturing base includes production capacity for a number of higher-value products that are exported to markets elsewhere in the world. Preliminary conclusions of the review will be discussed with New Zealand employees over coming weeks as part of a consultation process.

Rathbone said Nufarm is “strongly committed to the New Zealand market and to continuing the delivery of high quality products and services to New Zealand customers.”

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