29 August 2007
Procurement outsourcing company ICG Commerce has signed a five-year deal with Chiquita Brands International to handle the food giant's indirect procurement.
Under the deal, ICG Commerce will help Chiquita around the world to manage areas of indirect spend, including transport, marketing, MRO (maintenance, repairs and operations) and IT.
Onye Uzoukwu, Chiquita's vice-president of global procurement, said the deal would help "to build a high-performance organisation by giving our procurement organisation access to the expertise that will enable us to focus on our core competencies and deliver more value to the company".
Uzoukwu also expected the agreement would help to drive cost savings at Chiquita, whose annual revenues are about $4.5 billion.
In its financial results for the second quarter of 2007, released earlier this month, Chiquita reported a fall in net income to $8.6 million, from $22.9 million on the same period in 2006.
It saved $3 million annually in the second quarter of 2007 in the banana segment of its business, mainly through efficiencies in its tropical production and supply chain.
It also saved $7 million in the salads and health snacks segment, principally through better production scheduling and logistics.
However, both areas of the business were affected by higher input costs.