Merged food and condiment giant Kraft Heinz will shut down its salad dressing and sauce factory in southwestern Ontario and six other U.S. plants in a bid to cut its “excess capacity.”
The company announced Wednesday it will shut its Richardson Foods plant at St. Marys, Ont., which makes and sells salad dressings, sauces and dessert toppings for foodservice clients, affecting 214 jobs.
The St. Marys plant and facilities at Campbell, New York; Lehigh Valley, Pennsylvania; Madison, Wisconsin; Federalsburg, Maryland; and Fullerton and San Leandro, California will close over the next 12 to 24 months, for an expected net loss of about 2,600 jobs in all.
In a “staged process” over that time, the company will shift production from those sites to other plants in North America, Kraft Heinz’s senior vice-president for corporate and government affairs, Michael Mullen, said in a statement.
Consolidating its manufacturing across its North American network is “a critical step in our plan to eliminate excess capacity and reduce operational redundancies” for Kraft Heinz, which formed this summer from the merger of Kraft Foods Group into H.J. Heinz.
The move “will make Kraft Heinz more globally competitive and accelerate the company’s future growth,” Mullen said, describing the plan as a “difficult but necessary decision (made) after thoroughly exploring extensive alternatives and options.”
The Richardson Foods plant, which has operated at St. Marys, about 35 km north of London, for over 50 years, came to Heinz in 2004, when it bought the Unifine Richardson business in Canada from Dutch processor Royal Cosun.
Jim Krushelniski, Heinz Canada’s CEO at the time, said the St. Marys plant offered “dedicated manufacturing in a state-of-the-art facility, expansion in key product and customer segments, and proven foodservice development resources that have the capability to service an increased demand for proprietary recipes.”
Richardson Foods and Heinz Canada “have had a strong and long presence in our community, and we sincerely appreciate the excellent working relationship they have had with the town,” St. Marys mayor Al Strathdee said in a separate statement Wednesday.
Strathdee said the town is “saddened” by the news of the pending closure and it’s “our sincere hope that these individuals will be able to find employment (in town) and remain a part of our community.”
Mullen said Kraft Heinz, over the next two years, will also move production from its existing Davenport, Iowa plant to a new site to be built in the Davenport area and move “part” of its cheese production from its Champaign, Illinois plant to other factories and make Champaign “a centre of excellence in dry and sauce production.” Both moves will take up to two years to complete.
Kraft Heinz in 2016 will also move its Oscar Mayer arm and its U.S. meats business unit from Madison, Wisconsin to its headquarters in Chicago, bringing 250 jobs to the Chicago area.
The moves announced Wednesday follow Kraft Heinz’s separate announcement in August it would cut about 2,500 jobs in the U.S. and Canada, including about 700 of the 1,900 positions at its Chicago headquarters.
Heinz, in the year before its merger with Kraft, also sold its tomato processing plant at Leamington, Ont. to Highbury Canco, a consortium of Ontario investors including plant managers. Heinz had said the previous fall it would shut the Leamington plant and lay off its 700-plus employees. –– AGCanada.com Network