CSM shuts US bakery units for €60 million in savings
this week it would close four of its bakery ingredients
distribution units in the US.
Slicing away nearly 150 jobs and bringing savings of about €60 million in turnover, the €2.8 billion firm will shut down BakeMark East centres in Buffalo, Saratoga, St Louis and New Orleans.
The head office of BakeMark East in Schaumburg, Illinois, will also close down.
"This move is part of CSM's strategy to improve its profitability through Restructuring,Divestment and Growth: one element of this is a zero-tolerance approach to loss-making activities," confirmed the Diemen-based company.
From mid-May, the remaining activities of BakeMark East will merge with BakeMark West, operating under the name of BakeMark USA.
CSM, is currently in the process of divesting its confectionery unit, expected to sell for about €850 million, that together with biochemicals, sugar and bakery supplies complete the CSM stable.
Carving a bigger slice of European bakery ingredients market and a key factor in the ongoing drive to drill down into bakery supplies, CSM went on the acquisition trail in 2003: buying in June the bakery operations of Coberco Dairy Foods, outside The Netherlands, that had an annual turnover of €11 million.
And in May, 9500 strong CSM reached an agreement to acquire the bakery ingredients business of Unilever in Hungary. The transaction, valued at €5.1 million ($5.9 million), took effect from 31 May 2004.
In March 2004 the firm officially sealed the merger of UK bakery ingredients and finished foods firms, Arkady Craigmillar, Readi-Bake and Caravan Brill.
CSM bought Readi-bake, a subsidiary of Country Home Bakers with annual sales of €22 million, in 2003 for €28 million, giving the firm a step up into American-style cookies and sweet treats in the British market.
At the end of last year, in a €24 million deal CSM signed off its stake in non-core activity Koninklijke Nedalco, a natural alcohol supplier.
Jaap Vink, CSM chairman stressed recently that the biochemicals division in particular would benefit from the new focus.
This unit, which covers a wide range of products including lactic acids and food preservatives sold mainly under the Purac brand, saw a slight drop in turnover for the first half of this year to €138.9 million.
