Nufarm to take A$39M charge on Aussie restructure; reviewing NZ
March 18 (BusinessDesk) - Nufarm, the agricultural chemicals manufacturer, will take an A$39 million charge against this year’s results to close plants, service centres and back office functions to bolster returns.
The company, which makes herbicides and pesticides, plans to close manufacturing plants at Welshpool in Western Australia and Lytton in Queensland. It will also close six facilities in a reorganisation of its network of regional service centres and warehouses, cut jobs in support and administration, and move to a new management structure, managing director Doug Rathbone said in a statement.
“This is about improving the business and more effectively meeting the needs of our customers with an efficient and cost-effective structure,” Rathbone said.
The company is also reviewing its manufacturing operations in New Zealand and will discuss its preliminary conclusions with staff over coming weeks “as part of a consultation process.” It gave no details.
Rathbone said Nufarm “is strongly committed” to the New Zealand market.
The changes will be made over the next two years. Of the A$39 million booked in the current year, A$28 million would be a non-cash impact, the company said. Cost savings from the reorganisation are expected to be A$13 million a year.
Shares of Nufarm last traded at A$3.90 on the ASX and have fallen about 20 percent in the past year while the S&P/ASX 200 Index climbed 6 percent.
The shares are rated ‘hold’ based on the consensus of 12 analysts polled by Reuters, with a median price target of A$4.80.