Nufarm (NUF) has revealed the results of the second prong of its company wide review – an examination of its New Zealand business – with the decision to close its manufacturing facility at Otahuhu in Auckland in New Zealand which will cost 59 jobs.
The closure comes in the wake of last month’s closure of Nufarm’s Welshpool plant in Western Australia and Lytton facility in Queensland alongside 105 job cuts.
Nufarm said it expects to incur one-off restructuring costs from the Otahuhu plant closure of $11 million, of which $9 million is non-cash.
The Otahuhu shutdown is expected to result in annualised cost savings of $3 million once implemented, bringing the total annual savings from the operational review to $16 million (including $13 million from the Australian restructure).
NUF 1Y – Nufarm to close Kiwi plant
Nufarm managing director Doug Rathbone said in yesterday’s statement the changes include a larger logistics presence in New Zealand to ensure effective customer service.
“We will maintain a development laboratory in Auckland to support both local and global product innovation and we will retain our North Island warehouse facilities. In addition, we will expand warehouse and logistics support in the South Island to support our growing business in the south,” he said in the statement.
The manufacturing capacity from Otahuhu will be shifted to Nufarm’s expanded facilities at Laverton in Victoria.
Nufarm said it expects to reap a $10 million profit on the sale of land associated with the Otahuhu site.
Nufarm shares edged up 8c to $4.07.
And Insurance Australia Group (IAG) shares finished up 3 cents yesterday at $5.49 after the company again reaffirmed its full year guidance for gross written premium growth of 3% to 5% (that’s one of the core revenue readings for an insurer).
Delivering an update to investors on its Australian insurance operations, IAG said it expected to achieve its guidance for the year to June 30, despite relatively flat growth in the Australia Direct business.
The company said it still anticipates a reported insurance margin of between 14.5% and 16.5% for the year.
IAG’s Australia Direct business, which includes the core NRMA Insurance brand, generates more than $4.5 billion in gross written premium income a year and accounts for just over half its annual profit.
