By James A. Loyola
Del Monte Pacific Ltd. is selling the production facilities of its US unit Del Monte Foods, in an effort to move to an “asset-light” approach to business.
In a disclosure to the Singapore bourse, the company said the facilities to be closed are located in Sleepy Eye, Minnesota and Mendota, Illinois.
“Production will cease at these facilities at the end of the current pack season. In addition, Del Monte’s Cambria, Wisconsin facility will be sold as an operating facility after completion of pack,” Del Monte said.
It added that, “the company will also be selling manufacturing assets at its Crystal City, Texas facility and intends to transfer production at this site to outside locations later this year.”
Production at these locations “will be primarily transitioned to other Del Monte production facilities in the United States.”
The firm said “these facility closures offer Del Monte the ability to fully utilize the capacity of its existing production facilities and increase its focus on branded growth and innovation.”
“This decision has been difficult and has come after careful consideration.
This restructuring is a necessary step for us to remain competitive in a rapidly changing marketplace. Our asset-light strategy will lead to more efficient and lower cost operations,” said Del Monte managing director Joselito D. Campos Jr.
He stressed that, “we are committed to doing all we can to provide the affected employees with resources and support.”
Del Monte’s profit for its fiscal year ending April hit $20.3 million, a turnaround from the prior year’s $36.5 million loss.
Sales stood at $2.0 billion, down 11 percent from last year as a result of its sale of its Sager Creek brand and lower sales in its US operation.