Brenntag to reduce workforce by 1,300 jobs in restructuring move

27 Oct 2020 --- Brenntag Group is spearheading a corporate shakeup that will see a reduction of 1,300 jobs over the next two years. The supplier plans to close around 100 facilities across all its regions, half of which are third-party logistics sites.

Under “Project Brenntag,” the German ingredients company expects a “sustainable” annual contribution of additional operating EBITDA of €220 million (US$260 million) in total by the beginning of 2023. 

“To harvest our full potential, it is crucial to become leaner and more efficient. The implementation of the various measures of Project Brenntag will also include an adjustment of our global workforce,” says Christian Kohlpaintner, CEO of Brenntag.

“This step will be anything but easy for us, but it is necessary to ensure Brenntag’s success in the long-term. We intend to perform any planned reductions in a socially responsible manner and strive to avoid compulsory redundancies.”

The business expects a reduction of less than 200 jobs within its home market.

Brenntag plans to use natural fluctuation, mutually agreed separation and regular and early retirement schemes to perform the adjustments while “striving to avoid compulsory redundancies.”

The measures will be further elaborated over the coming months in line with local rules and labor regulations.The company expects a reduction of less than 200 jobs within its home market.

Restructuring global facilities
Starting in January 2021, the company will be steered in two global divisions, Brenntag Essentials and Brenntag Specialties. As part of the transformation, Brenntag will invest in optimizing its global site network.

The total net cash outflow to incur in course of the implementation of Project Brenntag is expected to amount to around €370 million (US$437 million).

At the same time as its site closures, the group will invest in existing and new facilities, create regional hubs and “close white spots” in the network.

In recent moves, Brenntag Food & Nutrition (Brenntag F&N) opened its newest Food Application & Development Center (FADC) in Guarulhos, Brazil, in June.

The opening marks the 5th FADC for Brenntag F&N in Latin America and the 30th globally, following a flurry of deals in the past months.

New leadership culture
In line with the operating model, Project Brenntag also entails new roles with clearly defined accountabilities and responsibilities. 

This includes a new leadership structure, starting with the composition of the Management Board and the top leadership team. 

“The competences and skills needed for the transformation have been defined, and Brenntag will invest significantly in training to enable its employees to bring in their strengths and expertise,” the company outlines.

In the past months, Brenntag F&N has entered a number of deals across the world. A flurry of deals
In the past months, Brenntag F&N has entered a number of deals across the world. In June, Emsland revealed its latest strategic partnership with Brenntag F&N in Russia. The partnership is set to reorganize the Emsland group’s sales structure in Russia.

In May, the Brenntag F&N business unit in North America entered a new collaboration with Axiom Foods for the distribution of plant proteins in the US and Canada. Axiom Foods is active in the space of clean label and dietary inclusive ingredients for the food, beverage, nutraceutical and specialty foods industries.

Meanwhile, in April, Brenntag F&N revealed an exclusive deal with French flavor house Mane, with an ambition to expand its distribution partnerships across Europe. The agreement will see Mane’s solutions distributed in Spain, Portugal and Switzerland. 

The new partnership closely followed a similar agreement to expand its chocolate business.

Edited by Benjamin Ferrer