[24 May/The Wall Street Journal]

Swiss consumer-goods giant Nestlé aims to generate up to USD$2.49 billion (approx. NZD $3.8 billion) in savings by 2020 with around half of these savings already made through boosting efficiency and centralising procurement. The company is scrutinizing its manufacturing footprint, consolidating procurement and simplifying its recipes to cut billions in costs by next year, Chief Financial Officer François-Xavier Roger reported. The company believes it has much further to go with reducing manufacturing costs as they have only saved 35 percent of the goal amount for that sector of the business. Mr Roger reports that the company is closing on average one plant a month with some of the facilities repurposed and some manufacturing functions being transferred between plants. The cost cuts have already had a measurable effect on the company’s financial results, improving its margins, capital expenditures and working capital. Changing consumer tastes are playing a role in the effort.