A senior management shake-up and a cost-cutting program have been prescribed to lift the performance of Low & Bonar plc's money-losing plastics division.
The division's French rotational molding business - the group's poorest performer in 2002 - has been taken over directly by L&B's new chief executive officer, Paul Forman.
Forman, who joined the company in September, stressed his commitment to the company's three activities: rotomolding, flooring and polymer-based yarns and fabrics, which he said provide ``a sound, strategic base.'' But he also acknowledged that L&B's operational performance ``has considerable scope for improvement.''
The rotomolding division, Bonar Plastics, ``has failed in the past to take full advantage of growth opportunities and deliver its earnings potential,'' Forman said. L&B has put in new senior management to address those problems.
Plastics operations are ``well-placed to benefit'' from a more global approach, research and development, increased international sales and marketing as well as sourcing. The division is seeking new business in growth sectors like pharmaceuticals, water treatment and nonfossil energy, according to Forman's in-depth review of operations in Europe and North America.
Short-term objectives highlighted in the report include the pursuit of growth by introducing new products and through geographic expansion and acquisitions.
London-based L&B has appointed new group nonexecutive board members and two new divisional managing directors, and has set up a group executive management team comprising the CEO, group finance director Jon Kempster and the divisional chief executives. A further shake-up is promised for middle management to carry out the review's short-term objectives.
The group has reorganized its European plastics molding operations, replacing the old Bonar Plastics Europe structure with two region-based units. One unit that covers northern Europe includes rotomolding plants in Germany, Poland, the Netherlands and Denmark, while a southern unit includes facilities in France and Spain. A new general manager in France, Francis Lavelle, already is in place, Forman said in a telephone interview.
He admitted that the French business had a bad time in 2002.
``It was a lot to do with the transition of products [to the units from the closed U.K. business Bonar Rotaform Ltd.] and their manufacturing base,'' he said.