CAMDEN, N.J. — The Campbell Soup Co. is closing a soup, sauces and beverages manufacturing plant in Sacramento, Calif., and a spice plant in South Plainfield, N.J. The company cited supply chain improvements, volume declines for canned soups, and a focus on new packaging formats that are often produced under co-manufacturing agreements as reasons for the closings.
Campbell plans on ceasing operations at the Sacramento facility by July 2013. Production will be shifted to three other facilities in Maxton, N.C., Napoleon, Ohio, and Paris, Texas. The South Plainfield spice plant will be closed by March 2013, and spice production will be consolidated to the company’s larger spice plant in Milwaukee, Wis.
Campbell Soup Co. management anticipates the company will incur pre-tax costs of approximately $115 million, most of which will be incurred in fiscal 2013. The program will require approximately $27 million of capital spending. Campbell expects the efforts, once fully implemented, will result in annual ongoing pre-tax savings of approximately $30 million beginning in fiscal 2016, with fiscal 2014 savings of approximately $21 million.
“As we position Campbell for profitable growth, we must continue to optimize our U.S. plant network and diversify our manufacturing capabilities,” said Mark Alexander, president of Campbell North America. “We expect the steps we’re announcing today to improve our competitiveness and performance by increasing our asset utilization, lowering our total delivered costs and enhancing the flexibility of our manufacturing network. These actions also will eliminate the capital investments needed to maintain the Sacramento plant.”