ConAgra to close plants under restructuring plan
some of its 150 manufacturing and food processing plants to improve
efficiency, the company said in its latest earnings report.
Like other food companies ConAgra has been restructuring over the past two years due to low growth in its markets both at its base in the US and overseas.
The company did not specify which or how many manufacturing and processing plants it will close. However ConAgra's board of directors said they would attempt to reduce inventory, staff andexpenses. The board also pledged to reduce manufacturing capacity and increase productivity. Details on the closures would be released at a later date the company said.
The company reported fourth quarter sales of $3.7bn (€3.1bn), down four per cent from the same period last year. Fourth-quarter net earnings declined 40 per cent to $101.9m (€85.6m) from$169.3m (€85.6m). The decline was blamed on lower profits from packaged meats. The company said pork and beef prices have been rising in the US and in Europe, leading to higher costs.
The company said it has been unsuccessful in attempts to raise prices for its meat products to combat higher costs and the declines could continue into the current fiscal first quarter.
Sales in the company's retail products segment were $2.1bn, down six per cent compared to the same period last year. Operating profit in the division fell by about 24 per cent, to $243m from $319m.Packaged meat profits, which account for a quarter of the retail division, fell by 12 per cent. Retail accounts for 60 per cent of ConAgra's annual sales.
In fiscal 2003 the company sold some of its fresh beef, pork, canned seafood and processed cheese operations. The company also closed down chicken and feed operations in Spain and inPortugal. The company also said in its previous annual report it was actively trying to sell the agricultural products segment of UAP International.
ConAgra is North America's largest foodservice manufacturer and second-largest retail food supplier. The company employs 85,000 staff worldwide and manufactures brands such as Hunt's, OrvilleRedenbacher's, Snack Pack, Van Camp's, Peter Pan, Manwich, Beanee Weenee, Swiss Miss and Knott's Berry Farm.
International Home Foods, a company ConAgra bought in 2000, markets brands like Chef Boyardee pasta products, PAM cooking spray, Bumble Bee seafood and Gulden's mustard.
The company has more than 150 manufacturing plants, about 100 of which are in the retail products and foodservice products segments. The company has plants and offices in the UK,the Netherlands and Switzerland.