The new chief executive of Nufarm has pledged to centralise spending and the company’s manufacturing and procurement hubs as the agricultural chemical giant continues with its ambitious $100 million cost-cutting and efficiency drive.
Greg Hunt, who stepped in as acting chief executive when the company’s founder and former boss Doug Rathbone was ousted in February, was yesterday confirmed as Nufarm’s new chief.
Mr Hunt, formerly group executive for operations, takes the reins at the company, which specialises in crop-protection chemicals, during a period of widespread operational changes as Nufarm seeks to take a more global approach to its business.
Mr Hunt praised his predecessor, saying Mr Rathbone left “a fantastic platform” that had allowed Nufarm to grow from an Australia-only operation into a global organisation.
But the former Elders executive signalled a different approach to that taken by Mr Rathbone, saying the regional control of the business would change under his leadership.
“We will protect the integrity of the regions because they have the interface with customers but I think where we will make some changes will be in having a more centre-led manufacturing and procurement (operation),” Mr Hunt told The Australian.
“The regions at the moment decide how they invest money into the portfolio. We will probably take a more centre-led approach as to where those dollars actually get invested because we need to start thinking and acting as a more globally co-ordinated business rather than five distinct operating units.”
Mr Hunt said Nufarm’s three-year, $100m cost-cutting drive would continue and pinpointed the areas of procurement, logistics and duplication of manufacturing sites as possible targets for review.
“What we are doing now is verifying them and making sure that we (either) want to do all of them or some of them and then work about how, over the next two to three years, we implement that,” he said.
“If you look at the buckets of money there, we procure just under $2 billion a year, we think there is some significant savings by co-ordinating that procurement more centrally than we currently do it across the five regions.”
Nufarm’s goal to cut $100m worth of costs has been coupled with a further “aggressive” program to reduce net working capital below its present level of $842m.
Nufarm chairman Don McGauchie said Mr Hunt had shown strong leadership during his time as acting CEO.
“We remain on target to significantly strengthen our returns to shareholders through targeted cost savings, more effective management of working capital, and profitable growth. The board has full confidence in Greg being able to deliver on those objectives,” he said.
Mr Hunt will be paid a fixed annual salary of $1.2m.
By Mitchell Bingemann
