Syngenta updates on Accelerating Operational Leverage program

Syngenta recently announced important steps in the implementation of its Accelerating Operational Leverage program. The program targets savings of $1 billion by 2018 and has three main pillars: Commercial; Research and Development; and Global Operations.

In Commercial, Syngenta has successfully implemented a crop-focused approach to marketing since the launch of the integrated strategy in 2011. This is now deeply embedded in the organization and fully recognized by our customers. As a result, it is now possible to establish a simplified marketing structure which will improve both efficiency and their ability to create distinctive grower offers. In addition, significant synergies at the global crop level have been identified which will be realized through combining and simplifying management and resources. Expected savings from the new commercial structure are $115 million in 2015.

In Research and Development, the consolidation of sites will enable the company to reduce fixed cost base and better identify and exploit synergies between chemistry and genetics. Increased use of outsourcing for standard activities will allow scientists to focus fully on high value innovation,it said. The company expects savings from these actions to total $50 million in 2015.

In Global Operations, fixed cost overheads will be reduced by moving certain activities to lower cost locations. In addition, further significant procurement and production savings are being targeted and a more efficient global logistics model is being put in place, including significant outsourcing. In Seeds, efficiency programs in field production and processing are also underway. Expected savings from these actions are $100 million in 2015.

The actions being implemented will result in job reductions and relocations totaling around 1,800 across the company, the majority of which will occur in 2015.