H.J. Heinz closing two plants in Europe

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The overhaul of the H.J. Heinz Co.'s global operations continues, with employees at two European plants notified Wednesday that the Pittsburgh food company plans to shut down the facilities.

A plant in Turnhout, Belgium, with 157 workers and one in Seesen, Germany, with 190 employees, will be closed as part of what the company described as a "comprehensive and ongoing process to review our company's European supply chain footprint, capabilities and capacity utilization."

Heinz, which was acquired for more than $28 billion last year by a joint venture of 3G Capital and Berkshire Hathaway, has seen new management looking for ways to cut costs.

Last year, that effort led to cutting more than 600 office positions in its North American operations -- including 350 in the Pittsburgh region -- and plans to close three plants, affecting 1,350 jobs. In making the North American plant closing announcement, the company said it would shift production to five existing plants, adding 470 positions at those sites.

The European operation seems to be going through a similar process.

On Wednesday, Michael Mullen, senior vice president of corporate and government affairs, said the plan is to shift production to other Heinz factories or to co-packers. "Our proposal to consolidate manufacturing across Heinz Europe, if implemented, would be a critical step in our plan to ensure we are operating as efficiently and effectively as possible to become more competitive in a challenging environment, and to accelerate the company's future growth."

Before closing the plants, the company must consult with unions that represent the employees.

The Turnhout operation makes a range of food service single-portion and bulk-sauce packs, according to Mr. Mullen, while the Seesen plant makes Heinz Fridge Packs of beans and pasta. It also makes infant meals.

Like North America, the European operation for Heinz represents a significant portion of total sales but has struggled to produce growth in recent years. In addition to a slow economy, the regions can't match the sales growth found in emerging markets where the middle class is expanding.

In the quarter ended Oct. 27, Heinz Europe reported a 3.2 percent sales drop to $783 million. By comparison, the company's North American Consumer Products segment saw sales drop 5.9 percent to $748 million.

The region that Heinz defines as "rest of world," which includes markets such as Brazil and Egypt, produced a sales increase of 3.5 percent to $279 million.

Teresa F. Lindeman: tlindeman@post-gazette.com or at 412-263-2018.


Teresa F. Lindeman: tlindeman@post-gazette.com or at 412-263-2018. First Published February 26, 2014 10:46 AM

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