Belgian Greenyard, which processes fruit and vegetables, has announced a major transformation plan in order to lower its debts. The company has announced to sell its factory in Hungary, divest its Prepared division and cut up to 422 jobs, mostly in the United Kingdom and Germany.
Negative spiral
The company is stuck in a negative spiral, as supermarkets forced it to lower its prices in Belgium and Germany. Moreover, the listeria contamination in Hungary cost the company a fortune.
Now Greenyard has announced to cut up to 422 jobs in its Fresh division: mostly British and German jobs are under threat, but Belgian and Dutch employees may suffer as well. Moreover, the Prepared division (featuring two Belgian and one Dutch plant) may be sold to an interested party, and several plants may be sold or closed – like the contaminated plant in Hungary. However, co-CEO Marc Zwaaneveld says, the listeria contamination was not the cause of this step, rather it is “no longer essential and weighs on our cost structure”.
The transformation plan should allow Greenyard to lower its debts from five to six times the gross profit to only three times that. The high debts were caused by acquisitions paid with borrowed capital, which has become a threat now the company’s profits have been decreasing dramatically.
