Food Service & Agriculture, Human Resources, and Manufacturing

Food maker closing plant

February 2, 2018
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This 425,000-square-foot food plant in Battle Creek makes cereals for retailers. Courtesy ConAgra

A food maker will close its plant in the region and shift production to another location.

Oak Brook, Illinois-based TreeHouse Foods said this week it will close its operation in Battle Creek by the fourth quarter of 2018.

In November 2016, TreeHouse announced it would downsize the Battle Creek facility and lay off 160 workers. Following completion of the first phase of that plan, the company decided the remaining operations would not be economically viable.

The Battle Creek facility produces ready-to-eat cereal. Those operations will shift to a manufacturing facility in Lancaster, Ohio.

The closure will affect about 84 remaining employees at the plant.

Brian Pitts, a spokesperson for TreeHouse, said the displaced workers will be given the opportunity to apply for positions at the Ohio facility.

The plant was part of TreeHouse’s $2.7-billion acquisition ConAgra Foods in February 2016.

The costs to close the remainder of the Battle Creek facility are expected to be about $30 million, of which about $20 million is expected to be in cash. Components of the charges include non-cash asset write-offs of about $10 million, employee-related costs of about $2 million and other closure costs of about $18 million. The company expects charges of about $0.38 per fully diluted share to be incurred in 2018.

Restructuring

The decision is part of the August 2017 announcement of TreeHouse 2020, the company’s restructuring program.

The restructuring included the closure of two other facilities in Brooklyn Park, Minnesota and Plymouth, Indiana in November 2017, as well as transitioning non-peanut packaging operations out of Dothan, Alabama by the third quarter of 2018.

Financial status

Net sales for TreeHouse (NYSE: THS) in the third quarter of 2017 totaled $1.5 billion, compared to $1.6 billion for the same period last year, a decrease of 2.4 percent.

The company’s 2016 revenue was $6.18 billion, up from $3.21 billion in 2015.

Full-year 2017 earnings will be discussed in a conference call with TreeHouse investors on Feb. 15.

TreeHouse Foods

TreeHouse Foods is a manufacturer of packaged foods and beverages with more than 40 manufacturing facilities across the U.S., Canada and Italy.

 It produces private-label and on-the-go products for retail grocery customers. 

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