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CSM announces further streamlining measures

By Anthony Fletcher , 03-May-2006

CSM's merger of two North American businesses is the latest move in a wide-ranging strategy to cut costs and achieve better operational focus.

The Dutch group's Bakery Supplies North America division, which is merging Caravan Products and American Ingredients Company (AIC) to form a single operating entity, has already carried out a number of cost-saving measures.

The group says that this latest initiative will result in further savings and an even more focused and competitive company.

The new company will be headquartered in Kansas City, Missouri where AIC currently resides. CSM says that Caravan and AIC sales organisations will not be affected, nor will the Caravan Product Development Group, which will remain with the Totowa, NJ plant.

However, approximately 30 positions and individuals will be affected by redundancies and the relocation of responsibilities.

This measure is in line with previous announcements. CSM's decision to close a US production facility last month for example was also part of what the firm calls its optimisation process of the supply chain at CSM Bakery Supplies North America.

The plant closure, due for completion by the second quarter of 2007, will result in production being transferred to other manufacturing facilities in a phased schedule over the next twelve months.

These two decisions were made as part of what CSM calls its worldwide 3S program (a Strong company, a Sharp team, and a Solid performance). The 3S program has led to restructuring measures not only in the US but also in the Netherlands, France, Germany and the UK.

In February for example, CSM announced its plans to sell its European sugar division in order to concentrate on high value ingredients. The company felt that CSM Sugar could not operate competitively on its own once the new EU sugar regime came into force in July 2006.

"CSM does not see itself as the consolidator of the European sugar market," said CSM chief executive Gerard Hoetmer.

The Netherlands-based company says that the purpose of the 3S programme is to focus its efforts on growth markets such as bakery ingredients and bakery products on the one hand and lactic acid and lactic acid derivatives on the other.

CSM is a global producer and distributor of bakery products and food ingredients. CSMs main product groups include bakery ingredients and products, lactic acid and lactic acid derivatives, and sugar. With these activities CSM has an annual turnover of € 2.6 billion and a workforce of approximately 8,500.

In the North American market CSM is the leading manufacturer and provider of bakery ingredients and products, including functional ingredients, mixes, fillings, glazes and icings, decorations and frozen batters, frozen cakes and dough.

CSM Bakery Supplies North America is headquartered in Schaumburg, Illinois.

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