Goodman Fielder wants to form "bigger, better" bakeries

Goodman Fielder wants to form "bigger, better" bakeries

Goodman Fielder has outlined plans for further reductions in its manufacturing network as the Australian company continues to try to revitalise its business.

In an update to investors, Goodman Fielder said it wanted to have less than 35 plants by the end of its restructuring plan in 2015.

It has 53 facilities; five are to be offloaded through the disposal of its Integro oils business and the plans to sell its milling operations in New Zealand. In June, Goodman Fielder announced it would close three bakery sites. With those closures lined up, that would leave the company with 45 facilities.

Pankaj Talwar, MD of Goodman Fielder's bakery business, said the company, which makes bread under brands including Country Life and Vogel's, wants to "improve operating efficiencies and effectiveness" from its bakery manufacturing network. He told investors Goodman Fielder wanted to implement "sustainable reinvestments aligned with bigger, better bakeries".

Goodman Fielder's restructuring plan, which it hopes will re-shape the business and allow it to "reallocate focus and resources" aims to save A$100m (US$101.7m).

The programme is not just focused on cost control; Goodman Fielder is looking to expand its presence in the out-of-home and foodservice channel. It has opened an "artisan" plant to cater for customers in the sector.

Last month, Goodman Fielder reported a smaller annual loss from the year before, driven by early cost cuts from the restructuring programme, as well as earnings growth in Asia Pacific, a market in which it wants to expand.

EBITDA amounted to A$299.8m, a 16.6% drop on the prior-year period, reflecting "challenging" retail markets, primarily baking in Australia and New Zealand. Sales declined by 1.7% to A$2.51bn.

CEO Chris Delaney said the trading result did "not yet reflect the considerable work being done by Goodman Fielder". He said he was "pleased with the progress" Goodman Fielder had made in the period.