Dairy company, Fonterra, is proposing to cull 300 jobs and investors have responded well, with share prices jumping to over $8.
Yesterday, chief executive Theo Spierings announced that the company's support services structure was under review, causing the unit company's unit price on the New Zealand Stock Exchange to rise 2.69 percent to $8.02.
According to stuff.co.nz shares closed up 3.07 percent at $8.05.
Spierings said the changes, which could affect workers in Fonterra's Auckland and Hamilton offices, are expected to save the company $65m a year, before restructuring costs.
He added that about 50 roles potentially affected by the cuts are currently vacant because of a staff freeze imposed in February this year.
Consultation with staff is under way at the moment, with the review to be completed at the end of May.
Spierings said, "The review has identified potential opportunities for us to deliver a range of corporate services centrally, reducing duplication and removing layers of management."
According to stuff.co.nz, the savings gained from the proposed job cuts would be reinvested to support Fonterra's growth priorities and would be additional to the $60m in cost savings the company has already committed to deliver this year.
In late April, Fonterra announced a restructure to its Asia Pacific/Middle East/Africa division, which saw the departure of MD Mark Wilson, and the appointment of Judith Swales as the new Australian managing director.
Swales was previously MD at Heinz Food Australia and also has experience at Goodyear Dunlop, Angus and Robertson as well as WH Smith and the food division of Marks and Spencer in the UK.
The big cheese
Fonterra Australia also made a big announcement yesterday, confirming it will invest $6.6m in upgrading the cheese production system at its Wynyard, Tasmania site.
The company received $659,000 from the federal government as part of its Clean Technology Food and Foundries Investment Program. Other companies to benefit from this hand-out include Teys Meatworks and confectioner Robern Menz. De Bortoli and Barossa Vintners will also be installing new solar power generators soon, expected to save the winemakers tens of thousands every year, and partly funded by the grant.
The new system includes eight new cheese vats which will improve efficiency in Wynyard’s cheese production and allow for a potential future increase in capacity.
The project will leverage Wynyard’s existing cogeneration system thereby reducing carbon dioxide emissions from the essential milk-warming portion of the cheese making process by 90 percent.
Minister for Climate Change, Industry and Innovation, Greg Combet, said "Fonterra will see a real difference to their energy consumption with this investment in energy efficient capital equipment and low emissions technology. Investing in clean technology is good for a company’s environmental footprint and good for their bottom line."
Swales added that the new technology will help boost business for Fonterra both here and abroad.
"Australia is a must-win for Fonterra. We have been investing over the years to develop a platform for growth in Tasmania and this investment continues that trend. By improving the efficiency of our factory and using less energy, we will boost the competitiveness of our high-value domestic and export products that Wynyard manufactures, allowing us to maximise returns," she said.
Works to install the system will commence in June 2013.