MELBOURNE, AUSTRALIA — The board of directors of Ridley Corporation Ltd. earlier this week approved an internal restructure plan that will see a significant reduction in staffing levels throughout the organization and the closing of several feed mills.
The company said a “leaner, simplified and flatter reporting structure” has been proposed that is designed to improve customer alignment while removing an estimated A$5 million in annualized costs from the organization.
“The new structure will remove a number of layers in certain parts of the organization, will provide clear lines of accountability, and will facilitate a more proactive relationship with our customers,” said Quinton Hildebrand, chief executive officer and managing director. “We will continue to leverage our centralized procurement purchasing and nutrition expertise to deliver a compelling customer value proposition.”
Ridley, a provider of high-performance animal nutrition solutions, said construction of a new feed mill in Wellsford, Bendigo, in Central Victoria remains on target for completion by the end of this year. Upon commissioning of the new feed mill, there will be a rationalization of Ridley’s existing mill capacity for the region, which will incur A$6 million of one-off costs to be brought to account in 2020.
The announcement follows the previously announced closure of the Murray Bridge feed mill in South Australia, which is expected to incur a net restructuring cost of A$6.1 million in 2020 but to deliver annualized cash savings of A$1.5 million, Ridley said, noting that the majority of these costs also relate to asset impairments and write downs and are non-cash in nature.
Gary Weiss, chairman of Ridley, said the restructure is an important step toward meeting the board’s objectives of improving domestic growth, leveraging its state-of-the-art facilities and accelerating the commercialization of its Novacq franchise internationally.
“In order to maintain our customer value proposition and facilitate growth in our markets, it is essential to have a competitive cost structure from which to leverage Ridley’s nutritional expertise, merchandising capability and production know how,” he said.