SWP Eliminating 200 Jobs

REGINA- Sep 17/02 - SNS -- The Saskatchewan Wheat Pool (SWP) plans to eliminate roughly 200 jobs, including roughly 80 head office and 30 management positions as it further restructures the company in an effort to bring costs in line with revenue projections for the 2002-03 marketing year.

The staff reductions will be phased in over the coming year. All employees affected will be provided with severance and transition support.

"With a more efficient country network, we have identified associated head office productivity improvements that will reduce our overhead costs while maintaining our commitment to customer service," Pool CEO Mayo Schmidt said. "As I've said before, our goal is to become the lowest-cost service provider for prairie producers and end-use customers."

The savings in fiscal 2003 are expected to be approximately $5 million, with future annual savings rising to $12 million. In total, the Pool will have reduced its core operating costs by more than $70 million since Schmidt arrived in January 2000, while increasing its market share and its ability to move a higher volume of grain. The company will record a provision of approximately $31 million, which includes $13 million in severance costs. The after-tax affect will be approximately $0.56 per share in fiscal 2002.

Schmidt says the drought has increased pressure on everyone in the industry to cut costs and reduce over capacity in the system. The Pool will accelerate the closure of seven older wooden elevators and 20 agri-products offices. At the same time, the company will make temporary service adjustments in drought-stricken regions of the Prairies.

These adjustments will be phased in over the fall and winter months to ensure customers' needs are met during harvest. Two elevators that were temporarily closed last year will re-open in light of renewed service needs. The Pool will continue to operate in more than 100 locations throughout Western Canada.

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