Numico cuts costs in baby foods unit
and cutting 525 jobs as part of a cost-cutting plan for its
European baby foods division.
Dutch food group Royal Numico is closing factories and cutting 525 jobs as part of a cost-cutting plan for its European baby foods division. The company says the €35 million it will save in 2006 will be ploughed back into initiatives to drive growth and increase margins.
The plan is part of Numico's strategy to specialise in high-end infant nutrition products, moving out of the dietary supplements and health foods area. It has sold off a number of smaller European operations over recent months, and this week announced the sale of its throatcare brands Pulmoll and Diele and their production facilities to German speciality food firm Zertus.
Jan Bennink, CEO of Numico, said reducing costs in the baby food manufacturing unit was the final stage of a five-part programme to transform Numico into a high-margin nutrition player. The Dutch company is currently the leading infant nutrition maker in Europe, although sales from this unit (€1.06 billion) contributed less revenue than its US supplement business GNC in 2002.
"This strategic plan provides a foundation of focus and resources which will enable the baby food division to lead in innovation, expand into selected developing markets and be the most cost-efficient supplier," he said.
The proposed plan leads to a loss of 750 jobs in seven redundant factories with the creation of 225 jobs in the remaining nine plants. The firm employed around 24,000 people during 2002.
The core activities in Numico's new strategy also include Clinical Nutrition and GNC, its US-based supplements business, although press reports last month suggested that the company was interested in receiving informal bids for GNC.
Pulmoll and Diele had €14 million in sales and a positive contribution to EBITA in 2002. The transaction will be completed on 7 July 2003, subject to customary regulatory approvals.
