Australian co-operative Dairy Farmers has today (Friday) announced a new series of restructuring measures, including cutting some support staff and a reduction in the number of sites at which it operates.
The company’s ‘grow, fix or exit’ strategy is delivering tangible results said CEO Rob Gordon.
“Since our announcement last month we have identified a reduction in our corporate support functions of 53 roles,” he said. “This follows on from the 160 reduction in roles primarily from our supply chain in the first half of fiscal 05, which brings the total corporate cost saving benefit to more than A$10m (US$7.7m),” said Gordon.
“We’re also reducing the complexity of our business by consolidating our South East Queensland operations at Tingalpa and Caboolture into one strategic site at Booval,” he said. “By restructuring our sales, finance, human resources, OH&S (occupational health and safety), farm services and milk trading teams, we’ll deliver further efficiencies.”
“By continuing to reduce complexity and simplifying the business, Dairy Farmers will be much better placed to compete in an increasingly competitive market,” he said.
The biggest of the property sales is a highly sought after riverside, 1.5 hectare site just minutes from the Brisbane CBD (central business district). It is the site of the Butter Producers Co-operative Federation Limited in which Dairy Farmers is the major shareholder.
The other properties being divested include Dairy Farmers’ Caboolture factory, Goodna milk depot in Queensland and former Dubbo factory in NSW.
Also up for divestment are the 14 Dairy Farmers Rural Stores including eight in New South Wales and six in Queensland, nine of which are owned and five leased. They employ a total of 74 employees, including both full time and casuals.
“The objective is to sell Rural Stores as going concerns. We have already received some interest from potential buyers for a number of our stores and will now seek to progress these transactions,” said Gordon.
Today’s announcement is one of a number of major changes to be implemented by Dairy Farmers before the end of this financial year as part of its major business restructure.
“We have a singled minded determination to turn this business around,” said Gordon. “We’re moving at a rapid rate, delivering significant results across the business and remaining on track to deliver double digit EBITDA growth during the second half of fiscal 05,” he said.