General Mills closures continue: Two Pillsbury plants to shut

09-Jan-2015 - Last updated on 12-Jan-2015 at 21:10 GMT

The two plants produce refrigerated dough products under General Mills' Pillsbury brand

General Mills will continue its cost-saving program across the US and Canada with further plant closures, announcing the shutdown of two Pillsbury production sites.

The bakery and cereal major will shut its Midland, Ontario and New Albany, Indiana plants by mid-2016, although the latter remains subject to negotiations with union officials. The closures impact around 500 employees.

The move comes as part of General Mills’ $40m cost-saving program announced in June 2014 to kick-start improved efficiency and growth, and follows another closure announcement last year.

In November, General Mills confirmed the planned closure of its breakfast cereal production plant in Lodi, California – a move impacting 430 employees.

Profit woes

The raft of closures comes at a time General Mills is struggling to stay afloat with profit and growth targets.

Last month, it posted a 37% profit plummet for the second quarter, citing a tough environment in North America, particularly across breakfast cereals, as a cause. Net profits for the previous quarter were down 25% on the previous year.

CEO and chairman of the board Ken Powell said the company had failed to deliver on its goal of accelerating sales growth.

“The operating environment remains challenging but as we move into the second half of our fiscal year, we expect to renew sales and profit growth and we will do that by innovating,” he told analysts in its Q2/half-year results in December.