ConAgra cuts plants, jobs as reshuffling continues
last week a number of new measures due to be taken as part of its
ongoing efforts to streamline operations.
The consumer goods giant on Thursday said it will close a further five plants and reduce its workforce by 400 over the next 12 to 18 months.
The news comes after the company in March announced the closure of several plants as part of its "overall strategy to achieve long-term, profitable growth". According to ConAgra, its restructuring program is designed to help streamline operations, reduce operating costs, improve capacity utilization and improve gross margins.
By fiscal 2009, the company said it expects total plant rationalization efforts under the program to result in a $100 million reduction in annual fixed costs.
Thursday's announcement included the closure of plants in Archbold, Ohio and Fort Worth, Texas. The company said it plans to construct a new facility in Forth Worth, upon approval of local tax incentives, to absorb some redistributed volume of canned bean, chili and pasta products from the closed facilities as well as from four more plants in Trenton, Missouri; Newport, Tennessee; Milton, Pennsylvania; and Oakdale, California.
The company also said its tomato paste production facility in Helm, California will operate on a seasonal basis only, and other product volumes will transfer to Oakdale, California.
The company's Waterloo, Iowa, pudding plant will expand and absorb production from Rossford, Ohio, which will close. The Menomonie, Wisconsin, pudding facility will also absorb pudding production from Rossford.
Its Memphis, Tennessee plant will discontinue production of plastic containers used for vegetable oil products, and use a third-party supplier.
ConAgra also said its Folcroft, Pennsylvania, snack plant will close; production will shift to Milton, Pennsylvania, and Garner, North Carolina, snack locations.
The company's taco shell production facility in Laval, Quebec, will close, marking ConAgra Foods' exit from this business.
"Our rationalization initiatives are designed to result in improved efficiencies and fixed cost savings that align with our strategy of strengthening long-term operating performance," said Gary Rodkin, ConAgra Foods chief executive officer.
"This is another key element in achieving a more efficient cost structure that will fuel growth by allowing more focused investments in marketing and innovation," he added.
In March, ConAgra announced plans to sell its seafood and cheese businesses. This followed the company's February announcement that it would divest most of its refrigerated meats operations.
The planned moves are the mark of an ongoing reshuffling in the food processing sector as companies attempt to adjust to pressure on prices from retailers, higher input costs, and to changes in consumer demand.
