Job losses at US rice bran supplier NutraCea

By Jane Byrne

- Last updated on GMT

Related tags Rice bran Wheat Rice Cereal germ

Rice bran and baby cereal specialist NutraCea is cutting 17 per cent of its US work force, a move the company claims will save $1m annually in its process of reducing its overheads under Chapter 11 bankruptcy.

“Our goal continues to be to reduce costs and increase profitable sales in an effort to enhance our liquidity and become cash flow positive in the second half of 2010,”​ said chief executive John Short about the layoffs.

In November last year the company filed a voluntary petition under Chapter 11 in the Bankruptcy Court for the District of Arizona in order to restructure its operations under court supervised protection and it also received court backing to move to cheaper premises.

The company also obtained credit totalling $6.75m later the same month through its successful application for Debtor-in-Possession (DIP) financing provided by Wells Fargo Bank.

NutraCea said at the time that the extra funding, combined with cash flow from operations, would allow it to resume normal day-to-day operations, including payment of post-petition obligations to vendors, service providers and employee wages.

"While there is a lot of work before us in the coming months, we remain optimistic about our management team's ability to successfully restructure the company and emerge as a more focused, stronger and viable company,​" said Short in November.

The company said that part of the viability strategy is the shedding of non-core assets and a focus on the company’s core businesses of stabilized rice bran research, development and commercialization, rice bran oil, baby cereal and nutraceuticals.

Rice bran

Rice bran is a by-product of rice processing that is usually discarded or used as animal feed, and NutraCea claims to be the only company in the world with the technology to stabilize the rice bran for human consumption, while maintaining its nutritional properties.

While rice bran is rich in fibre and a host of other beneficial nutrients, one of the main attractions for manufacturers is the cost savings it can confer.

It can be used as a low cost flour extender and a substitute for other, more expensive ingredients, including wheat. It is also claimed to improve product yield and maintain product quality.

UK bakery closures

Meanwhile, Irish food manufacturer McCambridge Group last week announced plans to close two bakeries in the UK which produce own-label goods.

The malt loaf maker said that two plants in Manchester, Lisa Bakery in Oldham, which makes Swiss rolls and mini rolls, and William Lusty in Heywood, which makes slab cakes, had been earmarked for closure because of physical constraints which inhibit improvements to plant efficiency, said the company.

Group commercial director Neil Fraser said that the production at these facilities would shift to other UK-based manufacturing facilities within the own-label division of the McCambridge group.

He said this would involve some job cuts among the 65 staff in Oldham and the 40 at Heywood.

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