Nufarm (NUF) will book a one-off restructuring charge of $39 milliom and close two manufacturing facilities as part of a reorganisation of its Australian operations, which the group says is necessary to become more responsive to cost pressures and increase its focus on product development.
Nufarm, an agricultural chemical company, said the reorganisation will include the phased closure of the Welshpool and Lytton manufacturing facilities, the closure of a number of regional service centres, and a significant streamlining of management resources across the business.
One-off restructuring costs of up to $39m will be booked in the current financial year, of which approximately $28m will be a non-cash impact.
The changes are to be implemented over a two-year period and once completed are expected to garner up to $13m in annual cost savings.
Nufarm said it owns the majority of properties proposed for closure and will seek to maximise sale proceeds after site closures.
Manufacturing facilities in Victoria will be expanded to facilitate production of those products currently manufactured at sites which will close.
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.
Nufarm managing director Doug Rathbone said the new structure places a stronger focus on product innovation and portfolio development.
He added that the reorganisation would also help improve the use of manufacturing assets and boost efficiencies across logistics and supply chain areas.