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Australia’s Coca-Cola Amatil to axe 260 jobs in its $100 million cost-cutting campaign

Australia’s Coca-Cola Amatil to axe 260 jobs in its $100 million cost-cutting campaign

SYDNEY:  Beverages supplier Coca-Cola Amatil (CCA) will axe more then 260 jobs as part of its $100 million cost-cutting campaign. The jobs were in the areas of human resources, IT and finance, and were mostly located in Sydney, company spokesperson said.

Two hundred and sixty positions will be cut in 2015 as part of the drinks giant’s restructure plan.

No one would lose their job before Christmas in this latest round of redundancies.

CCA’s profit dropped 16 per cent to $182.3 million in the first half of calendar 2014 amid weak consumer sentiment and aggressive competition.

The company announced in August that it aimed to cut costs by $100 million in Australasia over the next three years.

In September, CCA cut 100 jobs from its national supply chain.

In October, CCA announced that 57 jobs would go at its Bayswater manufacturing facility in Melbourne, and production would be moved to larger facilities.

CCA group managing director Alison Watkins said Australia’s trading conditions continued to be challenging.

The company was yet to see improvements in the supermarket trade and in pubs, clubs, bottle shops and other outlets.

Nonetheless, the recent launch of smaller cans and cans in a range of summer colours was tracking ahead of expectations in terms of transactions and attracting new customers.

Ms Watkins on Monday maintained the company’s forecast of second half earnings exceeding the $316.7 million recorded in the first six months of the calendar year, before significant items.

“This latest restructure, together with cost initiatives already in train, gives us a high level of confidence we will achieve our savings targets,” Ms Watkins said in a statement.

CCA said its Indonesian business continued to grow volumes and market share, but pricing and profitability remained under pressure because of competition and cost pressures.

In the first half of calendar 2014, CCA’s Indonesian business suffered a drop in earnings amid increased competition, adverse currency movements and a rapid increase in costs.

But the company is pushing on with plans, announced in October and backed by its US parent, The Coca-Cola Company, to expand in Indonesia.

Ms Watkins said the planned $US500 million ($A540.98 million) cash injection from The Coca-Cola Company into CCA’s Indonesian business would help support that segment of the business for the next three to four years.

Shareholders are due to meet on February 17 to vote on that proposed equity injection.

Morningstar analyst Daniel Mueller said CCA’s brief commentary on trading was consistent with what the company had already told the market.

He said CCA’s restructuring initiatives would probably start to show benefits in 2015, and more likely in the second half.

Shares in CCA were 8.5 cents, or 0.92 per cent, lower at $9.175 at 1116 AEDT.