Nufarm Ltd. is closing its manufacturing operations in Calgary and centralizing production in Chicago.
Canadian distribution locations will remain and have increased capacity to ensure customers will be serviced with the same or better response times, the farm chemical company said in a news release.
Also, all sales, marketing, and customer service operations in Canada remain.
“The decision to close the Calgary manufacturing facility is part of the company’s commitment to improve the performance of its operations,” said Elbert Prado, Nufarm’s head of operations.
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“We have invested to improve capacity of the overall North American manufacturing base, with a new state of the art seed treatment operation and full retooling of the herbicide facility in Chicago.… This proved a more efficient approach than expansion of the Calgary site.”
Chief executive officer Greg Hunt said in the news release that the changes are a further step in the company’s ongoing performance improvement program.
“The savings announced today are part of the performance im- provement program we an-nounced in February, in which we committed to delivering a net EBIT (earnings before interest and taxes) benefit of $116 million by fiscal year 2018.”
The Calgary closure is expected to result in permanent annualized EBIT improvement of $3.3 million. Nufarm will record one-off restructuring costs in the current financial year of $9.5 million, of which $3.7 million is a non-cash component.
The transfer of manufacturing activities from Calgary to Chicago will be implemented over the next nine months with about 18 full-time and 30 seasonal manufacturing employees affected by the changes.
Nufarm said it is progressing on its previously announced global manufacturing efficiency programs.
The Welshpool site in Western Australia is now closed and in the process of being sold, while the manufacturing facilities at Otahuhu (New Zealand), Lytton (Queensland) and Botlek (The Netherlands) are in the process of being shut down, decommissioned and remediated in preparation for sale or return of assets.
The company’s Pipe Road Laverton plant in Australia is also in the process of finalizing a reorganization of its manufacturing workforce.
