SINGAPORE - Food and beverage firm Del Monte Pacific Limited will close two US production facilities and sell a third in a bid to move to an asset-light strategy, it said in a bourse filing on Tuesday night (Aug 20).
Owned by its US subsidiary Del Monte Foods, the two facilities to be closed are located at Sleepy Eye in Minnesota and Mendota in Illinois while the third one in Cambria, Wisconsin, will be sold as an operating facility.
The three changes will be made at the end of the current pack season, said Del Monte.
The company will also be selling manufacturing assets at its facility in Crystal City, Texas, and will transfer production at this site to outside locations later this year.
Production at all four locations will be switched to other Del Monte production facilities in the US, the company said.
These facility closures allows Del Monte "to fully utilise the capacity of its existing production facilities and increase its focus on branded growth and innovation", it added.
"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 costoperations," said Joselito D Campos, Jr, managing director and CEO, Del Monte Pacific Limited.
"We are committed to doing all we can to provide the affected employees with resources and support."
For its fourth quarter ended April, Del Monte had more than doubled its net profit partly due to a higher gross margin for its US subsidiary Del Monte Foods.
Del Monte Pacific is dual-listed on the Singapore Exchange (SGX) mainboard and the Philippine Stock Exchange. On the SGX, it closed down $0.015 or 9.7 per cent to $0.139 on Tuesday.