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Goodman Fielder looks to sell milling, oils businesses

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Breads and spreads maker Goodman Fielder will consider selling its commercial milling and oils businesses under a restructure aimed at returning it to profitability.

Manufacturing plants in Western Australia and New Zealand may also be closed, the company said.

A review of the business initiated after a loss of $166.7 million in the year to June has so far resulted in $40 million in cost savings.

Another $60 million in savings are being targeted in the next four years.

The business is focussing on prioritising its portfolio of brands, renewing its group structure, and optimising its operations and supply chain, chief executive Chris Delaney said on Thursday.

The retail businesses are a priority, leaving its commercial milling and oils businesses as non-core, he said.

“We are currently exploring other options for these businesses which will maximise shareholder value and this may involve sale or joint venture,” Mr Delaney said.

The milling business is based in New Zealand, and supplies flour to commercial customers.

Goodman Fielder’s Integro business provides edible fats and oils to Australian and New Zealand manufacturers and wholesalers.

A number of other businesses, including dips, biscuits, frozen pastry and New Zealand meat and convenience meals, are also under review.

Brands identified as important to the group in the review include Helga’s, Vogel’s, MeadowLea and Meadow Fresh.

Other core brands include Wonder White, Praise and White Wings.

Goodman Fielder’s manufacturing base will also be consolidated, with plant closures proposed in Bunbury in Western Australia and Rotorua in New Zealand.

Mr Delaney said the business had begun to stabilise in the first quarter of the financial year, due to stronger fundamentals in its baking business and the benefit of cost savings.

“We can provide no specific guidance due to the volatility that exists in the market and because our recovery plans are still at an early stage,” he said.

Goodman Fielder shares closed steady at 55 cents.

Further updates on the restructure will be provided in February.