JBT FoodTech cuts back as recession bites

By Rory Harrington

- Last updated on GMT

Related tags: North america, Late-2000s recession, Europe

JBT FoodTech cuts back as recession bites
JBT Corp has blamed a drop in demand for its decision is to cut 115 jobs in its food processing division and shift some operations out of Europe in a bid to make annual savings of US$9m by the end of next year.

The US-based giant said its FoodTech operations had been hit hard by the economic downturn in Europe and North America and as it confirmed a plan to realign the business unit, resulting in the job losses.

The strategy involves relocation of certain operations from Sweden, where overheads are higher, to lower-cost regions to boost its profit margins. The company said job cuts were scheduled to be made in the first half of 2012.

Freezer and batch sterilisation

The move will see it transfer the manufacturing of certain freezer product lines to North America and China to better address local market needs and tackle currency impacts in the Scandinavia country.

The shake-up will also involve the reducing its batch sterilisation equipment production footprint to “reduce presence in higher cost regions”, ​said the firm.

It also flagged up the need to further reduce costs in response to lower demand in Europe and North America - without giving details of what this would mean.

"2011 was a challenging year for our FoodTech operations as we faced significant headwinds that negatively impacted our margins,”​ said Charlie Cannon, JBT chairman and chief executive officer.

He added: “Furthermore, economic uncertainties are pressuring demand in our major markets, particularly Europe and North America. As a result, we are implementing plans to re-align our FoodTech manufacturing capacity to further reduce costs and better address end market demand."

The company said it would continue to scrutinise the economic situation closely and declared that it would make further cutbacks if necessary.

FoodProductionDaily.com contacted JBT FoodTech but the company wa unable to respond prior to publication.

Related topics: Processing & Packaging

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