The Kellogg Company, a US-based food company, has outlaid a four-year global strategy, Project K, to amass considerable savings to be invested in core business areas of the company.
With this project, the cereal maker expects pre-tax charges in the range of $1.2bn - $1.4bn, alongside non-cash costs of around $275m and $325m by the end of 2017.
In addition, the global workforce of the company will be brought down by 7% over the course of the improvement program.
Kellogg Company president and CEO John Bryant said that the company is excited by the potential and opportunities it has for growth in the categories in which it operates.
"As a result, we are making the difficult decisions necessary to address structural cost-saving opportunities which will enable us to increase investment in our core markets and in opportunities for future growth. These actions will set a foundation for our Sustainable Growth operating principle," explained Bryant.
The latest improvement plans come in the wake of a 1.7% drop to $504m in operating profits during the third quarter of 2013. Net sales remained flat at $3.7bn during the three-month period.
Kellogg North America has also reported a decrease of 1.3% to $2.4bn in internal net sales during the third quarter, while the same in Latin American business grew 6.7%.
However, reported net sales in Asia-Pacific markets dropped by 9.4% and increased 6.4% in European segment.
Kellogg, meanwhile, is intending to invest primarily for the expansion in core, developing and emerging markets and in the global category teams.
Capital expenditure are estimated to be between four and five percent of sales in 2014 and 2015, the company stated.
"The marketplace is constantly changing and evolving and we must adapt. We remain committed to our core businesses and have great initiatives planned that we believe will drive revenue growth and increasing profitability in the years to come," concluded Bryant.
Image: Kellogg World Headquarters. Photo courtesy of Battle Creek CVB.
