Global bakery supplier CSM’s restructure plans could lead to up to 500 job losses, as it aims to cut costs by €50m (£43.8m).
In its third quarter trading statement, announced today, the firm said it had commenced a business review, including a reassessment of market developments and its own business plans.
Earlier this month, the supplier announced the company-wide restructuring programme, with a view to reducing total costs by €50m by the end of 2013, with at least a €30m (£26.3m) reduction to be achieved in 2012. The firm said it would report back on this review in its full-year results presentation.
CSM had previously announced a cost reduction programme for its Bakery Products North America business, which will now become part of the wider cost reduction activities. This will include the closure of a number of plants and offices, a drive to improving efficiencies in the organisation, including a reduction of organisational layers, and driving significant discretionary cost reductions.
Sales for the third quarter grew slightly to €784.8m (£687.2m) compared with €783.7m (£686.3m) in 2010. However, EDITA stood at €30.3m (£26.5m), compared to €56.7m (£49.7m) in the same period in 2010.
The firm said it did not expect to see any improvement in the trading environment for the remainder of the year, with the pressure of increasing raw material prices, compounded with a drive for increased promotional activities, hitting profits.
Gerard Hoetmer, chief executive officer of CSM, said: “In our ‘bakery supplies’ activities, the volume pressure due to significantly lower consumer demand led to increased price competition and promotional actions, particularly in the retail channel.
“These actions have partly offset our earlier implemented price increases to compensate for the higher input costs and required continuous trade-offs between margins and volumes.”
He added that it had been appropriate for the firm to engage in promotional activity in the short term, in order to protect its leadership position in the market and leave it well-placed to drive growth in the future.