McCormick & Co. has confirmed its plan to drive efficiency gains at its Europe Middle East and Asia business will result in job losses.
The company announced yesterday (17 October) that plans to implement “several projects” in the EMEA region as part of its Comprehensive Continuous Improvement (CCI) efficiency programme. Actions identified include the closure of McCormick’s current operation in the Netherlands, where it will use a third party to continue to distribute the Silvo brand.
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“The planned actions will result in job eliminations,” a spokesperson for the US spice maker told just-food. “Until the consultation process of the company’s employees or Works Councils is complete, we prefer not to comment on the scale of these reductions.”
However, the spokesperson did confirm that McCormick is not planning to close any manufacturing facilities in the region. “There are no closures of production facilities,” the spokesperson revealed.
The CCI programme was launched in 2009 in a bid to improve efficiency. Throughout 2012, the group achieved savings of more than US$200m, the company said. In 2013, McCormick expects to deliver savings of $55m.
McCormick said it expects to record about $27m in charges related to the plan with around $25m to be recorded in 2013. As a result, the company revised its projected 2013 earnings per share to be at the lower end of a $2.89 to $2.95 range. Adjusted operating income for the fiscal is expected to rise by 3-5%. This excludes an expected negative impact of 4% related to the CCI programme and negative 3% from US pension charges.
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By GlobalDataAnnual CCI cost savings are projected to reach around $10m by 2015, the company added. This will contribute to the company’s long-term goal of achieving at least $45m in annual CCI-related cost savings.
