A spokesperson for the US agribusiness giant said the job cuts were arising in order to keep ADM’s animal nutrition business agile and competitive in a challenging environment.
It is to avoid job duplication.
The company said a reorganization proposal was presented to unions on Tuesday [June 18]. The information-consultation process is pending, said ADM.
“This reorganization would allow us to adapt and evolve our growth strategy from a capital-intensive model that is based on external growth to an approach that is more centered on organic growth,” said Pierre-Christophe Duprat, head of ADM Animal Nutrition.
Most job cuts will be at Neovia’s former headquarters in Saint-Nolff in the northwestern region of Brittany, in France but some are likely for its research lab in Chateau-Thierry, east of Paris, as well, reported Reuters.
The plan would see around 66 employees losing their jobs, while it also entails vacant posts not being refilled and temporary contracts not being renewed.
ADM said that while the acquisition of Neovia helped position it as one of the world leaders in animal nutrition, the current industry environment is challenging and highly competitive, and it also noted a downward trend in meat consumption.
In February, when asked whether there would be job cuts with the merger of Neovia into ADM Animal Nutrition, Duprat told us:
“No, we want to grow the business. We want to benefit from the assets and product lines on both sides. It is important that we keep all the sales people and their [long-standing relationships] with customers. Perhaps, there will be [restructuring] on the support, or more corporate functions. There may be a few changes in the organization, here and there, and we will look at that in the coming year.”
Future asset building
In terms of future acquisitions for ADM Animal Nutrition, he said.
“Of course, we are always [keeping an eye] on market developments, but we have a lot on our plate at the moment, and we want to get better before getting bigger again.”
He said back in February that the Neovia deal brought ADM Animal Nutrition scale.
“Though we are big in the US, we were really a regional player [in the animal nutrition side of things]. Of course, we had developed our premix business in Central America and in China. We were selling some ingredients and amino acids globally, but, besides that, we were local. Therefore, [the deal] brings us scale, access to other markets – Central America with Mexico and South America with Brazil. Neovia is also quite strong in Western Europe. It has already invested in Africa, and it is in many countries in Southeast Asia, so [now we truly have] global reach.”
“We have a nice range of ingredients including mycotoxin binders, amino acids, prebiotics, etc. but we are enlarging our range of additives and feed ingredients [through this deal]. Neovia has organic trace minerals, palatants, sweeteners, and a range of probiotics, so we will combine all that.”