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Campbell Soup Shutters California Plant, Cuts 700 Jobs On Falling Sales

by Staff Reporter
Posted On: 9/27/2012

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TAGS: vending, Campbell Soup Co., Campbell Soup factory closings, Campbell's oldest American facility, Campbell spice plant, Campbell financial report, soup sales

CAMDEN, NJ -- Citing "excess capacity," Campbell Soup Co. said it will be shutting down two factories.

The Sacramento, CA, plant, which makes soups, sauces and beverages, will close in phases before shuttering for good in July, the company said. Built in 1947, it's Campbell's oldest American facility, and has the highest production costs in the food company's network.

About 700 full-time employees will lose their jobs, according to Campbell. Production will be redistributed to plants in Maxton, N.C., Napoleon, OH, and Paris, TX.

Campbell will also close the doors of its South Plainfield, NJ, spice plant. The factory is expected to turn off the lights in March, and 27 employees will be affected. Spice work will consolidate into a larger facility in Milwaukee.

Campbell said the cost-cutting moves were inevitable due to "significant productivity improvements, volume declines of U.S. canned soup and an increased focus on new packaging formats which are often produced under co-manufacturing agreements."

The factory shutdowns will result in pretax costs of $115 million, mostly in fiscal 2013, along with $27 million in capital spending, Campbell reported. But the company expects to save $21 million in fiscal 2014 and an additional $30 million a year beginning in 2016.

This month, Campbell reported its first boost in U.S. soup sales in two years -- a 9% increase in its fiscal fourth quarter, buoyed by condensed soup.

Overall, the Camden, NJ-based company is making a strong effort to turn itself around through several expansion strategies. This month, Campbell said it is planning to buy companies that would ramp up its global baking and snacking business. In July, it announced plans to acquire Bolthouse Farms for $1.55 billion in cash. The acquisition of Bolthouse will provide Campbell with a substantial presence and new platform for expansion in the rapidly growing $12-billion market for packaged fresh foods. | SEE STORY