Affco looks to cut 100 plus jobs

By Phil Boeyen, ShareChat Business News Editor

Wednesday 13th March 2002

Meat processor Affco (NZSE: AFF) is halving its head office staff and cutting up to 45 jobs at North Island plants in a further bid for profitability.

Chairman, Sam Lewis, says the cuts are inevitable as the company intensifies its efforts to reduce costs and increase efficiencies in a season characterised by erratic livestock flows.

"The company is embarking on the final stages of its structural and cost review process, which is likely to result in a further reduction of staff in head office support functions from 130 to approximately 65.

"It is also expected that up to 45 jobs will be lost across the company's eight North Island plants."

Mr Lewis says by the time the latest cuts have been made the company will have effectively reduced its head office and international staff numbers by more than two-thirds, including those in off-shore offices.

He says a comprehensive review of the company's structures and operations has demonstrated that the level of costs in the business is not sustainable.

"While it has certainly been an erratic season as far as livestock numbers are concerned, we recognise the need to be competitive across all parts of the season - not just the peak.

"We are determined to take the hard decisions which will make a sustainable difference to our costs and our efficiency."

Affco has been promising for some time that it is headed for sustainable profits but in the year ended September 2001 it only managed $574,000 net profit and earnings before interest and tax of $11.4 million on revenue of $1.2 billion.

One of Affco's major shareholders, Green & McCahill, recently said it had run out of patience with the company and was selling its 10% stake to South Island seafood firm, Talley's.

Sam Lewis says it's not easy to confront issues which impact directly on jobs but believes the staff cuts are in the interest of whole company and its 3500 employees.

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