Whiteland: Market decline of below 10%, bearable without layoffs

Whiteland foodstuffs distributor, which went beyond the 100m-euro mark in terms of sales in 2008, this year bets on tapping into new market segments to boost the productivity of current employees.
“We’ve budgeted growth along all categories for this year. For January, I estimate zero organic growth or a growth rate below that of the first month of 2008,” stated George Stefanescu, head of Whiteland Sales & Marketing.
The company’s main suppliers are now dairy producers Hochland, Meggle and Campina and the domestic subsidiary of Orkla Foods Norwegian group.
The manager says the main objective he set for 2009 is to avoid giving up part of employees by boosting productivity per employee.
“Any change, either on the market, or in our collaboration with a major customer, can bring us significant losses by cutting turnover, because margins are extremely small in distribution,” he stated.
The major challenges of 2009 for distributors are their keeping margins within the limits that should allow them to survive any cash pressure coming from customers. Moreover, the 10-15% growth rates they posted in the past three or four years could turn into stagnation or even a slight decline in 2009, according to players’ early 2009 estimates.
Stefanescu believes a shrinking of the market by a rate of below 10% would not entail dramatic moves, such as layoffs, but a very tight cost control. “As early as last June we made the first moves to protect our business from the future fallout of the financial crisis. The first cost cuts targeted the 400-car fleet, by dropping the expenses that weren’t necessary,” he says. Moreover, the company wants to seal distribution partnerships with new suppliers to boost its turnover and ease cost pressures. Expanding the portfolio of distributed products while keeping the number of employees unchanged could this way offset a potential market decline in 2009. Targeted categories include frozen meat and ready-meal.
The most important challenges he sees on the market include delays in recouping money from customers.
In 2008, Whiteland Sales & Marketing overshot the 100m-euro sales threshold and turnover at group level, including Whiteland Logistics unit, revolved around 110m euros. Turnover in 2007 stood at 80m euros.