Logistics News

$30m logistics hike forces Goodman Fielder down

Rising logistics costs have seen Australia's largest listed food group Goodman Fielder book a dramatic 88 percent fall in its

Rising logistics costs have seen Australia’s largest listed food group Goodman Fielder book a dramatic 88 percent fall in its 2008 net profit.

In announcing its full-year results for 2008, the company says it has had to adsorb a $30 million increase in logistics costs along with a commodity bill some $235 million higher.

And the company sees little improvement in its underlying earnings in the current financial year due to further uncertainty around commodity costs and future economic conditions in its operating markets of Australia and New Zealand.

But the company insists the “solid” result was respectable in a difficult trading market.

The year saw Paradise Foods, the country’s second-largest biscuit manufacturer, acquired and integrated into the company.

It has also begun sourcing locally in China with the signing of a long-term contract with a Chinese company to manufacture fats and oils at a plant in the Shanghai region.

“This will allow the company to grow its Chinese customer base, reduce its conversion costs and avoid the need to supply finished goods from Australia,” the company reports.

Goodman Fielder also says it has optimised its logistics platform while pursuing manufacturing efficiency. Facilities have been closed at Mascot in Sydney and in Geelong near Melbourne, with construction beginning on a new state-of-the-art packaged food manufacturing plant at Erskine Park in Western Sydney.

The company has also begun a program of outsourcing linehaul distribution to third-party providers.

Goodman Fielder is a leading provider of baked goods, dairy and meats and other ingredients.

Previous ArticleNext Article
Send this to a friend