Brambles closes Cleanaway's London office

The Anglo-Australian pallet giant Brambles Industries shut down the London headquarters of its industrial waste management business yesterday, in the latest in a string of costly restructuring exercises.

The Anglo-Australian pallet giant Brambles Industries shut down the London headquarters of its industrial waste management business yesterday, in the latest in a string of costly restructuring exercises.

About 20 jobs will go as Brambles ships the running of its Cleanaway business to Brussels to try to cut costs. Jean-Louis Laurent, the chief executive of Brambles' industrial services business, will oversee Cleanaway as its current boss, Gerben Westra, is stepping down.

The move to Brussels will trim about £2m from the £290m profits expected this year. However, Brambles has pencilled in annual savings of about £2m in years to come by running the two businesses under one roof.

The Sydney-based company is looking to slash costs after profits plunged 44 per cent in the six months to December following more problems at Chep, its pallet business.

Brambles, the world's biggest supplier of wooden pallets, is already set to take a hit of about £40m this year to pay for earlier changes to the structure of the group. That comes on top of a £62m exceptional charge in the 12 months to June 2003.

One City analyst said: "This is a business that has been in perpetual change over the past four years. Brambles has become renowned for exceptional costs."

A series of profit warnings and downgrades has hit the shares, which were down 3.5p at 206.25p yesterday, well off their 372p high in 2001.

In May, Brambles reassured investors that business was finally on the up at Chep, which accounts for about 60 per cent of group profits. A month later, it surprised the market by unveiling yet another restructuring of Chep, a business that analysts had thought was back on track. Brambles split Chep in two - one half to cover the Americas and the other Europe. Victor Mendes, the division's global head, left the company.

Two divisional chiefs will now report directly to David Turner, who replaced Sir CK Chow as group chief executive last year.

The shake-up cost about 30 jobs and followed several earlier changes in the division since Brambles' merger with the industrial service arm of the engineer GKN in 2001.

Brambles "lost" 14 million pallets in 2002 and this year was ordered by a US court to stump up £350,000 to an American pallet recycler for storing 30,000.

The former FTSE 100 company, listed in London and Sydney, has seen profits slump after building up a huge excess of pallets in Europe, prompting it to axe 400 jobs to save £10m a year.

Cleanaway has deals with Croydon, Medway and London's Tower Hamlets councils and is developing a waste facility for Greenwich. Cleanaway also clears municipal, commercial and industrial waste in Germany, Australia, New Zealand and Asia.