Troubled Italian dairy group Parmalat plans to reduce its worldwide operations to focus on those in just ten countries as it tries to recover from a massive financial scandal.
The company plans to sell or liquidate operations in 20 countries, including many of its Latin American and Asian units, in order to concentrate on its operations in Europe, Canada and Australia, reported Reuters.
As a result of this, the company will cut its workforce from around 32,000 to under 17,000. In Italy, where the company employs 4,000 workers, Parmalat plans to integrate many of its operating units.
The company plans to focus on 20 key product categories by 2006, compared to 27 at the moment, while Parmalat will also focus on 30 brands, compared to 120 now. The company aims to generate 80% of total group net sales from six top global and international brands.
Parmalat said it had started selling its US units and has also started disposing of its assets in Chile. The company said it is likely to start selling its Mexican assets and is considering asset sales in Paraguay. Loss-making assets in Argentina, the Dominican Republic, Ecuador and Uruguay will also be sold. In Brazil, the company plans to reduce capacity by 25% on average.
Units in Hungary and Ireland are to be liquidated following court orders, while assets in the UK will be sold off, Reuters reported.
In Asia, the company plans to liquidate units in Hong Kong, Indonesia and Vietnam, sell units in Thailand and sell or close units in China.