As part of its projected cost savings between $25m – $30m through the acquisition of the Caltex chain of fuel stations from Chevron, Z Energy will relocate offshore services from Manila back to its Wellington headquarters.
Caltex budgeted $16.5 million for offshore services from its Philippines service hub in Manila, which Z Energy says it will merge into the Wellington-based operations, lowering the cost of its financial transactions, IT, and call centre activities.
Z Energy has committed to 12 months of employment for all Caltex Heritage staff, of whom five have elected to leave the organisation for personal reasons, and Z has decided not to replace some internal vacancies due to increased capability and resource across the two companies.
Total headcount reduction across the two combined companies is seven thus far.
Z also anticipates annual savings of $1.6 million moving Caltex’s refined fuel procurement to its existing supplier.
The company forecasts net savings of $1 million in the current financial year, rising to $10.3 million in 2017 and $13.8 million the following year.
In a report to investors, Z also affirmed the expected cost of achieving those savings to be $24 million of operating expenditure in 2017 and $9 million of capital investment.
Z Energy says still expects to cut annual costs by between $25-30 million from its Caltex acquisition and has started the process to sell 19 service stations which are a condition of the purchase.
