Syngenta updates on Accelerating Operational Leverage program
Basel, Switzerland, November 24, 2014
- Broad-based actions in Commercial, R&D and Global Operations
- Targeted savings of $265 million in 20151
- Delivering improved profitability, innovation and grower offers
Syngenta today announced important steps in the implementation of its Accelerating Operational Leverage program. The program targets savings of $1 billion by 2018 and has three main pillars: Commercial; Research and Development; and Global Operations.
In Commercial, Syngenta has successfully implemented a crop-focused approach to marketing since the launch of the integrated strategy in 2011. This is now deeply embedded in the organization and fully recognized by our customers. As a result, it is now possible to establish a simplified marketing structure which will improve both efficiency and our ability to create distinctive grower offers. In addition, significant synergies at the global crop level have been identified which will be realized through combining and simplifying management and resources. Expected savings from the new commercial structure are $115 million in 2015.
In Research and Development, the consolidation of sites will enable us to reduce our fixed cost base and better identify and exploit synergies between chemistry and genetics. Increased use of outsourcing for standard activities will allow scientists to focus fully on high value innovation. This will provide greater leverage for every dollar of our R&D investment and deliver a higher throughput of products into the commercial portfolio. Expected savings from these actions are $50 million in 2015.
In Global Operations, fixed cost overheads will be reduced by moving certain activities to lower cost locations. In addition, further significant procurement and production savings are being targeted and a more efficient global logistics model is being put in place, including significant outsourcing. In Seeds, efficiency programs in field production and processing are also underway. Expected savings from these actions are $100 million in 2015.
The actions being implemented from today will result in job reductions and relocations totaling around 1,800 across the company, the majority of which will occur in 2015.
Mike Mack, Chief Executive Officer, said: “We are today reporting significant progress in the implementation of the first phase of our Accelerating Operational Leverage program. In the short term, this will underpin the realization of initial cost savings in 2015 in the context of a challenging market environment. Longer term, the comprehensive actions announced today will enhance both our commercial effectiveness and the power of our innovation. By optimizing our cost structure within the framework of the integrated strategy, we will attain industry-leading efficiency. This will allow us to bring distinctive offers to growers more quickly and ensure a sustained improvement in profitability.”
1 Includes $75 million from existing efficiency program
About Syngenta
Syngenta is one of the world's leading companies with more than 28,000 employees in over 90 countries dedicated to our purpose: Bringing plant potential to life. Through world-class science, global reach and commitment to our customers we help to increase crop productivity, protect the environment and improve health and quality of life. For more information about us please go to www.syngenta.com.
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