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Ann: GENERAL: NFF: Rationalisation of European Manufacturing Footprint

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    • Release Date: 09/02/15 08:30
    • Summary: GENERAL: NFF: Rationalisation of European Manufacturing Footprint
    • Price Sensitive: No
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    					NFF
    09/02/2015 08:30
    GENERAL
    PRICE SENSITIVE
    REL: 0830 HRS Nufarm Finance (NZ) Limited
    
    GENERAL: NFF: Rationalisation of European Manufacturing Footprint
    
    Changes to generate annualised savings of at least (EUR)16 million
    
    Nufarm Limited today announced that 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 annualised cost savings of
    at least (EUR)16 million ($23 million).
    
    The rationalisation will result in one-off restructuring costs of up to
    (EUR)30 million ($44 million), the majority of which will be booked in the
    second half of the current financial year.  Some (EUR)15 million ($22
    million) are non-cash costs.  There will be incremental capital expenditure
    of (EUR)9 million ($13 million) associated with the changes to existing
    facilities.
    
    Nufarm's Group Executive 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 rationalisation 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's Chief Operating Officer and Acting CEO, Greg Hunt, said the planned
    changes form part of an ongoing performance improvement program that will
    deliver further cost savings over coming years.
    
    "The European initiatives are expected to be fully implemented by July 2016
    and are part of a cost reduction and performance improvement program that
    will deliver an estimated $100 million in savings over the next two to three
    years.
    
    "These estimated savings are in addition to the benefits associated with
    previously announced restructuring activity in Australia."
    
    Nufarm announced a re-organisation 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.
    The re-organisation has continued to progress on plan. Manufacturing
    activity at the Welshpool site (Western Australia) ceased prior to Christmas
    and the plants at Otahuhu (New Zealand) and Lytton (Queensland) are on track
    to close prior to the end of the 2016 financial year.  Expectations in
    relation to achieving the annualised cost and head count savings of $16
    million are unchanged.
    
    "We are maintaining a relentless focus on delivering higher returns through a
    combination of working capital improvements and other efficiencies combined
    with the strong earnings growth we expect to deliver over the medium to long
    term," said Mr Hunt.
    
    Nufarm today also restated its guidance for first half earnings, with
    underlying EBIT expected to be ahead of the same period last year. The first
    half results will be released on March 25.
    
    -- end --
    
    Further information: Robert Reis
    [email protected]
    (61 3) 9282 1177
    End CA:00260392 For:NFF    Type:GENERAL    Time:2015-02-09 08:30:45
    				
 
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