DEL MONTE Pacific Limited (DMPL) is shutting several factories in the United States as part of a restructuring program that seeks to bring down costs.
In a statement posted on its website, the canned fruit manufacturer said it is closing facilities in four locations owned by US subsidiary Del Monte Foods, Inc.
The facilities include those in Sleepy Eye in Minnesota and Mendota in Illinois, which will stop production at the end of the current peak season. The company will also divest from its facilities in Cambria, Wisconsin and from its manufacturing assets in Crystal City, Texas.
DMPL will transfer production in these locations to other facilities within the US. The company looks to fully utilize the capacity of its existing plants after the divestment.
“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,” DMPL Managing Director and Chief Executive Officer Joselito D. Campos, Jr said in a statement.
“Our asset-light strategy will lead to more efficient and lower cost operations,” he added.
The facilities are part of Del Monte Foods’ 10 plants in the US, which sells products under brands Fruit Naturals, Orchard Select, SunFresh, and Fruit Refreshers. The company also has two plants in Mexico.
In the Philippines, DMPL operates a 26,000-hectare pineapple plantation in Mindanao, dubbed as the largest fully integrated pineapple operation in the world. It also has a beverage bottling plant and frozen fruit processing facility in the country.
DMPL earlier postponed the P17.5-billion initial public offering of local unit Del Monte Philippines, Inc., due to market volatility. The company sought to raise money to prepay or repay the group’s existing debt.
In its fiscal year ending April 2019, DMPL reported a net profit attributable to the parent of $20.32 million, versus an attributable loss of $36.49 million the year before. Revenues, however, slipped 11% to $1.95 billion.
DMPL is listed on both the main board of the Singapore Stock Exchange and the Philippine Stock Exchange.
Shares in DMPL were down 3.9% or 24 centavos to close at P5.91 each at the local bourse Tuesday. — Arra B. Francia
