Agricultural chemicals supplier Nufarm is to cut 105 jobs and close two manufacturing plants under a restructure of its Australian operations.
Agricultural chemicals and seeds supplier Nufarm will cut 105 jobs as part of a cost cutting restructure of its Australian operations.
Nufarm expects the restructure will save up to $13 million a year, but will have one-off costs of up to $39 million in the current financial year.
The re-organisation includes the phased closure of its manufacturing facility in the Perth suburb of Welshpool, which produces specialised herbicides, and its Lytton plant in Brisbane which makes specialised insecticides and fungicides.
Nufarm’s Victorian plant at Laverton will be expanded to produce the products currently made at those sites.
Six out of 13 regional service centres will also be shut, and management across most of the group significantly streamlined.
Changes to support and administration roles will also result in job cuts.
Managing director Doug Rathbone said 105 employees, out of the company’s 673 staff, would be cut, impacting all areas of Nufarm’s business, except product development.
He said Nufarm would maintain its total manufacturing capacity in Australia, with no operations moving overseas.
Nufarm had to improve its Australian business and lower its high, inflexible cost base, Mr Rathbone said.
“These improvements will clearly ensure our future competitiveness and protect our market leadership position in Australia,” he said.
The Australian agricultural chemicals market had become much more competitive in recent years, with a lot of new entrants and a material increase in the number of new product registrations, Mr Rathbone added.
Pricing power and margins had suffered as a result, he said.
Drought has also added to the challenges facing the Australian business.
Mr Rathbone said Nufarm had to improve its response time to customers and launch more new products.
The changes are to be implemented over two years.
The company also said it was reviewing its New Zealand manufacturing operations, and would discuss the preliminary conclusions with New Zealand employees over coming weeks.
Nufarm warned in January that its Australian business would contribute lower than expected financial results in the first half of its fiscal year, given challenging conditions.
Nufarm reports its first half results on March 26.
The company’s shares gained 10 cents to $4.00.