Paperlinx streamlines operations

Paperlinx has further streamlined its operations after it reduced its global corporate overheads by AUS$15m (9.3m) per annum and brought chief executive Toby Marchant back to the UK.

The paper merchant has announced it will close its European head office in Amsterdam, while staff reductions have been made at the corporate head office in Melbourne. 

This will result in ongoing cost savings of approximately A$15m per annum, which the business said would be cost neutral in the current financial year.

Its two European regions will now report directly to Marchant, who will be based at the company's operational head office in the UK. The location for this office is under review and the company will confirm its whereabouts shortly.

Marchant said: "Our move out of manufacturing was always going to allow us to reduce central costs, but we have gone beyond that to create a head office structure relevant for the Paperlinx of tomorrow. 

"At its heart is a commitment to our unique value proposition that allows our 30 individual operating companies to shape themselves to precisely match the future needs of their customers."

He added that the support the company needed to achieve this was straightforward.

"There needs to be clear financial parameters and the effective leveraging of our global scale and capability in areas such as branding, procurement and working capital management," he said.

Marchant said PaperlinX will remain listed on the ASX, and said that his move along with chief financial officer Tony Kennedy to the UK is "about being closer to the geographical centre of our operations".

Some 70% of the merchant's business is in Europe, while 90% is in the Northern Hemisphere.
A spokeswoman for Paperlinx said it had an "ongoing objective of reducing its overheads by creating a flatter, more ergonomic structure".

She said: "Unfortunately this process has resulted in a number of redundancies. 

"As some individuals are still undergoing a consultation process, we are not in a position to comment on the total number at this time."

Last year, Marchant was appointed managing director and chief executive of Paperlinx as of 1 November.

In February 2009, Paperlinx agreed to sell its Australian manufacturing business Australian Paper for AUS$700m to Japan-based Nippon Paper Group.