Agricultural chemical maker Nufarm will restructure its European manufacturing operations as part of efforts to reduce its fixed cost base.
The changes, which are estimated to result in annualised cost savings of at least $23m, will take place over the next 18 months. They include the closure of a manufacturing facility in Botlek in the Netherlands which is likely to see about 50 employees lose their jobs.
In addition, the company plans to initiate efficiency programs at its manufacturing facilities in Wyke, England and in Gaillon, France.
The company said in a statement that the rationalisation will result in one-off restructuring costs of up to $44m. The majority of that figure will be booked in the second half of the current financial year.
Nufarm's Group Executive Operations, Elbert Prado, said in a statement –
"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 changes follow a similar restructuring of Nufarm's Australian and New Zealand manufacturing which will see six production sites reduced to three and are expected to result in savings of $16m.
Manufacturing at the Welshpool site in Western Australia came to an end late last year and the plants at Otahuhu in New Zealand and Lytton in Queensland are expected to shut before the end of the 2016 financial year.
Earlier this week, Nufarm announced that chief executive and managing director, Doug Rathbone would step down after 15 years of leading the company.
Commercial operations executive Greg Hunt will be the acting CEO as the company begins a global search for Rathbone’s replacement.
Hunt said in a statement, “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.”