ST. LOUIS — Post Holdings, Inc. said it plans to close its PowerBar manufacturing facility in Boise, Idaho, by July. Production is expected to transfer to third-party facilities under co-manufacturing agreements. The closing will affect approximately 165 employees.
“We regret that this decision will impact our employees in Boise, but we believe this is a necessary step to improving the PowerBar business model, the flexibility of the brand and improving long-term profitability,” said Rob Vitale, president and chief executive officer of Post. “We remain committed to ensuring that the PowerBar products continue to be manufactured to the highest quality standards.”
Upon closing of the facility and transfer of production, Post expects to achieve net pretax annual cash manufacturing cost savings of approximately $4 million beginning in Post’s fiscal year 2016. In connection with the closing, Post expects to incur one-time pretax charges of approximately $5 million, primarily in Post’s second quarter of fiscal 2015.
Post has sought to diversify its business since spinning off from Ralcorp Holdings Inc. in 2012. Post bought the PowerBar and Musashi businesses from Nestle for approximately $550 million last fall, and just last month Mr. Vitale outlined some ambitious plans for the PowerBar brand.
“PowerBar is a great brand but it has been neglected,” he said in a Feb. 6 conference call with securities analysts to discuss the company’s first-quarter financial results. “It requires product investment and a restart of its overall marketing strategies. We are planning and implementing the required changes. F.Y. 15 will be an investment year for this brand, with our efforts benefiting financial results in F.Y. 16 and beyond.”
A key initiative, Mr. Vitale said, will be expanding the brand into other product categories. He noted that the nutrition bar category had changed and PowerBar did not keep up with the changes.