Royal Numico NV, the Dutch-based infant milks, formulas and weaning foods producer, has reported that the recent earthquake in Indonesia has caused damage to its baby food operations at Sari Husada on Java, with its plants and its employees affected.
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The company said its two manufacturing facilities will not be operational again for two to three months. However, current stocks should ensure that consumers will be able to buy Sari Husada’s SGM products for the next eight weeks. After that, Numico said it would be exploring all internal and external sourcing options to limit disruption in supply.
The company added that repair and start-up costs, the write-down of raw materials and other related costs are estimated to total between EUR15m (US$19.36m) and EUR20m, net of insurance coverage. These costs will be taken in the second and third quarters of 2006. Loss of sales in the second quarter resulting from plant repairs is forecast to be around EUR8m.
Jan Bennink, Numico’s CEO, said: “Our first concern is for our people, their families and the community. The management of Sari Husada quickly set up an emergency center to offer aid to the injured employees and their families, as well as to provide assistance to those who have suffered loss of homes and belongings. I am proud of the speed and spirit of their first response and their commitment to Sari Husada’s employees.”
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By GlobalData
