Jam and condiment maker J.M. Smucker Co. plans to shut two of its Bick’s pickle and condiment plants in southern Ontario by the end of next year and farm their work out to its U.S. facilities.
The company on Tuesday described the move as “an initiative to address capacity underutilization in its Canadian pickle and condiments operations and to improve its overall cost structure.”
Smucker said it plans to shift the bulk of its processing of Bick’s pickles and other condiments to “third-party” facilities and one of its own plants at Ripon, Wisc., southwest of Oshkosh.
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That means closures by the end of 2011 for the Bick’s plant at Dunnville, Ont., about 50 km southeast of Hamilton, and for the Bick’s pickle tank farm at Delhi, about 80 km west of Dunnville.
The shift to the Wisconsin plant and others is expected to happen over the next 12 to 15 months, Smucker said. The company estimated the cuts in Ontario will result in the loss of about 150 full-time positions “when fully implemented.”
“Record” earnings
Ohio-based Smucker announced the move in a filing with the U.S. Securities and Exchange Commission as part of ongoing restructuring.
The company said in March it plans to shut four North American plants, including a jam plant in Quebec’s Beauce region, by mid-2013, at a total loss of about 700 jobs or 15 per cent of its workforce.
From the company’s financial perspective, the one-time costs of the two Ontario closures will mean restructuring charges of about $45 million (all figures US$) over two years, with “nearly one-half” to be incurred in fiscal 2011 and the rest expected to follow in 2012.
According to the filing by chief financial officer Mark Belgya, those costs include $15 million in “primarily employee-related costs,” with the rest booked as “noncash items, primarily accelerated depreciation.”
Smucker’s decision comes about five weeks after it posted “record” net earnings for its first fiscal quarter ending July 31.
The company reported net Q1 income of $102.88 million on $1.047 billion in sales, up five per cent from $98.06 million on $1.051 billion in sales in the year-earlier period.
Smucker’s, whose trademarks include Folgers, Jif and Crisco, lists Bick’s among a number of Canada-only brands it markets, including Robin Hood flour, Red River cereals and, in Quebec, Double Fruit spreads.
