US: National Beef plant closure to hit 1,300 jobs
National Beef blamed fall in supply of cattle for closure
National Beef Packing Co., the US beef processor, is to close a plant in California, with the loss of around 1,300 jobs.
The company said production at its site in Brawley would end in April. CEO Tim Klein said a fall in the supply of cattle for the site was a "key driver" in the decision to shut the facility.
"This was a very difficult decision for us to make because of the impact on our employees and suppliers. We are optimistic about the long-term prospects for US beef demand and we will continue to focus on expanding our position as the industry leader in value-added beef products," Klein said.
National Beef is majority-owned by US conglomerate Leucadia National Corp., which also assets including investment bank Jefferies and auto dealership Garcadia. Leucadia bought National Beef in 2011.
In a presentation to analysts in October, publicly-listed Leucadia warned: "Widespread drought conditions have contributed to a delay in the reversal of the downward trend in US beef cow numbers. Fewer cows ultimately result in lower supplies of fed cattle and that has reduced industry-wide beef packing margins and National Beef's profitability."
In the nine months to the end of September, income from continuing operations before income taxes and income related to associated companies from what Leucadia called "beef processing services" dropped 23% to $71.3m. Revenue from what is Leucadia's biggest business inched up only 0.3% year-on-year to US$5.63bn.
The closure of the Brawley site will mean National Beef no longer has operations in California. Its two other processing sites are both in Kansas.
National Beef Announces Plan to Close Brawley, California Beef Processing Facility
KANSAS CITY, Mo., Jan. 31, 2014 /PRNewswire/ -- National Beef Packing Company (National Beef) today announced plans to close its beef processing facility located in Brawley, California. The last day of production is expected to be April 4, 2014. Approximately 1,300 employees working at the facility will be impacted by this closure and will be offered support, including assistance finding employment at other National Beef facilities.
A declining supply of fed cattle available for the Brawley facility was a key driver of the decision to close the plant, said Tim Klein, chief executive officer, National Beef. "This was a very difficult decision for us to make because of the impact on our employees and suppliers. We are optimistic about the long-term prospects for U.S. beef demand and we will continue to focus on expanding our position as the industry leader in value-added beef products."
"We have a committed, hard-working team of employees and suppliers in Brawley, and we truly understand the impact this will have on them," said Brian Webb, vice president and general manager, National Beef. "We are grateful for their service to our company and we will work closely with them during this transition."
National Beef has not determined the future status of the facility. National Beef acquired the Brawleyfacility in 2006.
About National Beef
National Beef Packing Company, LLC, based in Kansas City, Missouri and its subsidiaries have operations in Liberal, Dodge City and Kansas City, Kansas; Brawley, California; Hummels Wharf, Pennsylvania; Moultrie, Georgia; and St. Joseph, Missouri. National Beef, with approximately 8,900 employees, processes and markets fresh beef, case-ready beef, beef by-products and wet-blue leather for domestic and international markets. More information about National Beef is available atwww.nationalbeef.com.
SOURCE National Beef Packing Company, LLC
Original source: National Beef Packing Co.
Sectors: Meat & poultry
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