29 April 2008 - Campbell Soup Company, in a statement, has announced a series of initiatives "designed to improve the company's operational efficiency and enhance its long-term profitability".
Firstly, Campbell Soup said it will close its Listowel, Ontario, plant in Canada, which mainly produces frozen products such as soup, entrees and Pepperidge Farm products, as well as ramen noodles. The facility employs approximately 500 people.
Campbell said it will operate the facility for approximately 12 months and then transition production to its network of North American contract manufacturers and to its Downingtown, Pennsylvania plant.
Secondly, the firm announced that it will exit the snack foods business in Australia by selling its snack food division in the country to a group of Australian investors, including senior management of The Real McCoy, an Australian owned snack foods company.
The transaction will include Cheezels, Thins, Tasty Jacks, French Fries, and Kettle Chips salted snack brands and 2 manufacturing facilities. The deal is expected to be completed in Q4 2008.
Finally, Campbell Soup added that it will discontinue private label biscuit and industrial chocolate production at its Miranda, Australia facility. Moreover, the company plans to close the Miranda facility, which employs approximately 150 people. However, this would be subject to union consultation.
Campbell plans to streamline its international management structure and "eliminate certain overhead costs associated with businesses the company has divested", the company said.
The statement added: "Campbell anticipates that it will incur pre-tax charges and implementation costs of approximately $230 million related to these initiatives. These charges will be incurred primarily in the third and fourth quarters of fiscal 2008. The company expects that the future savings from these actions will have a modestly favorable impact on earnings and cash flow beginning in its fiscal year 2009".
Campbell CEO Douglas R. Conant commented: "The actions announced today will continue to position Campbell as a high-performing focused food company. Through a relentless focus on our core businesses of simple meals, baked snacks and healthy beverages and by eliminating inefficiencies in our portfolio and operations, we will be able to meet the needs of customers and consumers faster, better and more completely than the competition and create greater value for our shareowners".
Campbell Soup's initiatives come only 1 month after the company completed its sale of Godiva Chocolaties to Turkey's Yildiz Holding AS for USD 850 million, as reported by FLEXNEWS.