The US$5 billion rail and ports operator Asciano is weighing up a potential tie-up with a major global firm for its terminals business and a possible acquisition of government rail assets, as it announced 500 jobs to go before next month.
Managing director John Mullen hopes the cuts from its 10,000-strong workforce will help generate $85 million in savings in the 2015 financial year and boost earnings, as it grapples with subdued market conditions, reported The Australian.
“There are a few little green shoots out there, but we need to plan that it is not going to get better,” said Mullen.
“We have taken a lot of cost out, so we should have a better year next year — even if we don’t get a lot of market growth.”
Mullen said cost reductions would be made in the company’s Pacific National rail divisions and corporate and shared services as part of a five-year plan launched to improve the business.
“It is partly because of merging the two rail divisions and partly to adjust to the conditions. The cuts across the board are more white collar than blue collar so they are in administration areas,” he said.
They will add to 200 cuts already expected with the automation of Port Botany in NSW.
The original improvement plan was announced in the 2011 financial year, but Asciano now says the programme has been doubled to $280 million in savings by the 2016 financial year.
Across Asciano’s business, rail volumes were down, the company’s grain and agriculture transportation operation volumes were volatile because of weather and seasonality, while the coal haulage business was performing strongly, although it faced less growth in the future on the back of waning demand, Mullen said.
Container volume growth also remained lower in its terminals business. Mullen said there were opportunities for a potential partnership in its terminals business with a global player and the company would work with adviser Goldman Sachs on options.
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