Glencore Xstrata CEO eyes cuts to forge success

2013-05-03 15:48

London – Glencore Xstrata chief executive said the group’s ability to slash costs and cut jobs in Xstrata's network of divisional offices would determine the success of the industry’s largest takeover to date.

“If we can cut costs enough, get rid of these corporate head offices, we can cut a lot of fat out of the system. These synergies and overhead reductions – that figure can ensure this merger is a success,” Ivan Glasenberg said in an interview today.

“The target of $500 million is only the synergies on the trading operations. When we came up with that figure we had no idea what the overheads were in Xstrata... and it wasn’t a takeover at that time.”

Glasenberg said Xstrata itself had estimated it could cut $300 million in overheads, on top of trading savings.

Glencore – which made its debut as a combined company on the London market – is expected by analysts to beat its savings goal with final synergies worth at least double the initial amount.

Glencore could also sell non-core assets, though Glasenberg said it would sell only mines and projects “sucking money” out of the business.

It has not yet begun the sales process for Las Bambas, the Peruvian copper mine it will have to divest to appease Chinese regulators – but expects Chinese interest.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.