CSM to further restructure in France

The company will reorganize the activities of its French subsidiary, Délices de la Tour (DLT), in order to reinforce its position and market share (18%) in France.

22/02/05 CSM has announced its second major restructuring move in a week as the global bakery supplies and food ingredients company battles to recover from the poor results announced six months ago. The company will reorganize the activities of its French subsidiary, Délices de la Tour (DLT), in order to reinforce its position and market share (18%) in France.

DLT is to concentrate on the production, development and sale of premium frozen dough products, such as special breads (stone-oven baked bread) and viennoiserie (croissants and brioches) and beignets. The bulk production of frozen baguettes will end. In addition, all logistical activities will be outsourced.

DLT plans to concentrate production in Le Mans and at Maubeuge Quick Pain. DLT has begun negotiations with the local trade unions and staff representative bodies regarding the closure of the Delicefood plant in Maubeuge, the production facility in Thoiry and the warehousing and distribution activities in Petit Couronne. The measures will affect, on balance, approximately 200 jobs. The company said however, that the intended concentration of the production will eventually lead to the creation of around 60 new jobs in Le Mans and Maubeuge Quick Pain.

CSM expects that, as a result of this reorganization, the heavily loss-making Délices de la Tour will already return to break even in the course of this year. CSM will charge the sum of approximately EUR 20 million to its 2005 results to cover the asset write-off and the costs of restructuring. It expects the reorganization to be completed by the end of 2005.

Last week CSM announced a restructuring of its North American distribution activities in bakery ingredients. Four BakeMark East distribution centers in the eastern United States will be divested, while the head office of BakeMark East in Schaumburg, Illinois, will be closed. The remaining activities of BakeMark East will be merged with BakeMark West, operating under the name of BakeMark USA from mid-May 2005. This restructuring will lead to significant cost savings. Moreover, the national orientation of BakeMark USA will result in an improved and more efficient approach to the market. The company said that the divestment of the unprofitable distribution centers will lead to a reduction of around EUR 60 million in turnover and a marked improvement in profitability.