Bay Valley Foods, a division of Oak Brook, Ill.-based TreeHouse Foods Inc., plans to close its 46-employee Springfield pickle plant by December. The move will save the company $2 million a year, officials said in announcing the closure March 1.
Platteville, Wis.-based Bay Valley Foods leases the 2848 N. Le Compte Road building from Lafayette, Calif.-based Bell-Carter Foods Inc.
The 72,500-square-foot plant, adjacent to Partnership Industrial Center and formerly operated by J.L. DeGraffenreid & Sons LLC as recently as 2002, produces pickles and relishes for restaurants and chain stores sold under the Bay Valley Foods name. It is one of four nonrefrigerated pickle-producing facilities run by Bay Valley – the others are in Faison, N.C; Plymouth, Ind.; and Green Bay, Wis., according to Ron Bottrell, a public relations liaison for the business.
Bottrell said the decision in Springfield was economic.
“With the ebb and flow of contracts on its accounts, the plant simply was underutilized and consequently, the unfortunate decision was made, for economic reasons, to consolidate it with other existing Bay Valley facilities,” Bottrell said. “All of the employees will have the opportunity to apply for any openings at other Bay Valley facilities.”
According to Springfield Business Journal archives, the pickle facility was opened in 1944. In 2002, J.L. DeGraffenreid & Sons reported it produced 65 million pounds of pickles a year, with 75 percent of its cucumbers coming from local growers.
Brian Demos, TreeHouse senior vice president of operations did not return calls for comment.
Publicly-traded TreeHouse Foods (NYSE: THS) posted fourth-quarter revenue of $509.5 million, a 26 percent increase compared to the same quarter in 2009. Retail grocery sales, which include pickle production, grew 35 percent in fourth-quarter 2010, though the company’s release to investors said that growth was primarily due to higher sales of salad dressings and sauces. Net sales for the year ended Dec. 31 increased 20 percent to $1.82 billion, according to its annual report.
As a result of closing the Springfield plant, nonrecurring, pretax charges of approximately $5 million, or 9 cents per share, will be added to TreeHouse’s operating income.
Officials said transition benefits and outplacement support would be provided to employees. Most plant production is scheduled to stop in August, before full closure in December.
Until operations are shut down, the company isn’t expecting any supply disruptions, according to a company statement.
TreeHouse Foods is the holding company for three other subsidiaries: E.D. Smith, Sturm Foods and S.T. Specialty Foods. Bay Valley Foods facilities also produce syrups, sauces, soup, salsa and salad dressings, in several states, according to
www.treehousefoods.com.
TreeHouse Foods shares closed March 2 at $51.48, compared to a 52-week range of $39.63 to $53.30.
Calls to Bell-Carter Foods for comment on possible uses for the facility were not returned by press time.
Rob Dixon, manager of business development for the Springfield Area Chamber of Commerce, said no representatives from Bay Valley Foods had reached out to the chamber prior to its announcement.
“We did not know ahead of time on this one,” Dixon said. “Sometimes, we will.
Sometimes, a company will contact us and request we put the existing business support team behind it to see if there is anything we can do.”
Dixon said the support program is a chamber initiative designed to assist companies going through a hard time to try and prevent job losses.
“With something like this, it sounds like it was more of a corporate-level decision,” Dixon said.
The March 1 announcement came a day before the full closure of Springfield’s Solo Cup Co. plant, 1100 N. Glenstone Ave. Dixon said the chamber had received some interest in the Solo plant through its marketing efforts, but he declined to disclose details.
The chamber promotes plant availability in the area through the Springfield Business Development Corp.’s Web site,
www.business4springfield.com.[[In-content Ad]]