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ConAgra to shutter five plants en route to 12 closings

FoodProcessing.com
09/18/2006

In its most sweeping rationalization so far, ConAgra Foods Inc., Omaha, Neb., announced plans in mid-September to close five manufacturing plants, although the toll could rise to 12 before completion of a reorganization plan. The current cuts will eliminate about 400 jobs and save the company about $50 million in fixed costs annually.

The plants to be shuttered and their products:

• Laval, Quebec — taco shells (marking ConAgra’s exit from that business)
• Rossford, Ohio — pudding (plants in Waterloo, Iowa, and Menomonie, Wis., will absorb production)
• Folcroft, Pa. — snacks (production will shift to Milton, Pa., and Garner, N.C.)
• Archbold Ohio, Fort Worth, Texas — canned bean, chili and pasta products (production will shift to a new plant planned for Fort Worth)

Two other plants will reduce production and six will increase production as part of changes over the next 12 to 18 months. ConAgra's tomato paste plant in Helm, Calif., will operate only on a seasonal basis. As a result, production will increase at the Oakdale, Calif., plant. And the company's Memphis, Tenn., plant will stop producing plastic containers for vegetable oil products. ConAgra will buy containers from a supplier instead.

The operational changes are expected to occur over the next 12-18 months. The 400 job losses associated with this announcement represent the net change in jobs after some plants gain work and others close.

The closings and reductions are part of a plan announced earlier this year that has a goal of saving about $100 million a year by fiscal 2009. A spokesman said the mid-September changes account for about half the intended savings.

The company had previously announced plans to build a new plant in Fort Worth as long as local tax incentives are approved. That facility, which will be a regional canning and distribution center, could eventually gain 400 jobs over the current Fort Worth plant, the spokesman said.

ConAgra plans to expand its Waterloo, Iowa, pudding plant to handle most of Rossford's pudding production.

ConAgra's overall restructuring plan involves shifting the company's focus to the brands company officials believe have the most potential, such as Healthy Choice, Chef Boyardee and Egg Beaters, according to a company statement. Already this year, the company has sold its refrigerated meats, seafood and cheese businesses – brands such as Butterball, Cook's, Louis Kemp, Armour, Decker, Ready Crisp and Margherita.