TreeHouse Foods to close Delta, B.C. facility and downsize Battle Creek, Mich.
Staff Writer |
TreeHouse Foods announced its intention to close a facility in Delta, British Columbia and reduce its manufacturing footprint in Battle Creek, Michigan.
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The decision follows an analysis of the company's plant network to align operations with the current and future needs of its customers and eliminate excess manufacturing capacity.
The Delta facility employs approximately 90 employees and produces frozen griddle products, primarily for the North American Retail Grocery segment. Production is expected to cease in early 2018. The company operates two facilities in Delta, and this announcement only affects the frozen griddle facility.
The Battle Creek facility produces ready-to-eat cereal, primarily for the North American Retail Grocery segment. The partial closure will affect approximately 100 of the current 160 employees over a 15 month period beginning in January 2017.
The decision is being announced in advance of the downsizing in order to provide employees with as much notice as possible and to ensure a seamless transition for customers.
Both the Battle Creek and Delta griddle facilities were part of the company's acquisition of the ConAgra Foods private brands business in February 2016. The company will provide support to employees whose positions are being eliminated.
Total costs to close the Delta facility and downsize Battle Creek are expected to be approximately $14.7 million, or $0.16 per fully diluted share, of which approximately $6.8 million, or $0.08 per fully diluted share, is expected to be in cash.
Components of the charges include non-cash asset write-offs of approximately $7.9 million, employee-related costs of approximately $4.6 million and other closure costs of approximately $2.2 million.
The company expects approximately $4.0 million and $3.1 million of the charges to be incurred in the fourth quarter of this year and the first quarter of 2017, respectively, with the balance of the charges being incurred through the end of 2018. ■