US-based packaging solutions company MeadWestvaco (MWV) has announced a two-year programme designed to generate increased earnings and cash flow.
The company plans to implement a leaner organisation design across its packaging businesses in order to simplify the structure and speed of decision making. It also intends to align its corporate infrastructure to its revenue base and prioritise capital on the highest-return projects to improve free cash flow. MWV also aims to reassess participation, to focus on business lines and markets within packaging that provide an opportunity for profitable growth.
With at least $75m expected to be realised in 2014, the programme is set to deliver annual pre-tax cost savings of approximately $113m by the end of 2015.
The packaging firm said that the programme savings are in addition to its previously announced overhead reduction actions targeting savings of approximately $78m by the end of 2014.
MWV chairman and CEO John Luke Jr said that the company is targeting markets through four growth pillars; commercial excellence, innovation, emerging markets and expanded participation.
"These initiatives, coupled with the increasingly strong performance in our speciality chemicals business, will generate significant progress this year in the form of increased earnings and free cash flow, as well as solidify the establishment of a leading business platform that we expect will deliver consistently growing returns to shareholders," Luke added.
Image: By the end of 2015, MWV's new programme is set to deliver annual pre-tax cost savings of $100m to $125m. Photo: courtesy of MWV Corporation.