A Del Monte Foods factory in California is to close in the wake of the sell-off of the US group’s assets.
The site in Modesto packs canned Del Monte products. CBS News reported the closure would affect 600 jobs.
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Last week, Fresh Del Monte, B&G Foods and Pacific Coast Producers struck deals to buy assets from Del Monte Foods, which had been in Chapter 11 bankruptcy proceedings since July.
In a statement, Del Monte Foods confirmed the facility in Modesto was no longer needed.
“In connection with Del Monte Foods’ court-supervised sale process, the go-forward business will not require the operational capacity provided by the Modesto plant. As a result, Del Monte Foods has made the difficult decision to begin an orderly wind-down of operations at the facility,” the statement read.
The company did not confirm the number of jobs that would be affected.
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By GlobalDataLast July, Del Monte Foods president and CEO Greg Longstreet said moving into Chapter 11 proceedings and selling off assets was “a strategic step forward” for the company and “the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods”.
Fresh Del Monte Produce agreed a deal for the bulk of Del Monte Foods’ assets for $285m under the court-supervised process.
The company is set to secure ownership of Del Monte Foods’ vegetable, tomato and refrigerated fruit businesses, subject to court approval at a hearing slated for 28 January.
The transaction includes the Del Monte and S&W brands of packaged vegetables; the Del Monte, Contadina, and Take Root Organics ranges of packaged tomato products; the Del Monte brand in refrigerated fruit; and the Joyba ready-to-drink beverage brand.
Fresh Del Monte is also set to acquire sites in Texas, Illinois, Wisconsin and Washington in the US, along with two plants in Mexico and one facility in Venezuela, according to a statement.
Meanwhile, under a similar process, B&G Foods is to buy Del Monte Foods’ broth and stock operations, including the College Inn and Kitchen Basics brands.
Pacific Coast Producers will acquire Del Monte Foods’ shelf-stable fruit business assets, excluding production sites. It includes the rights and licences to use the Del Monte and S&W brands for shelf-stable fruit products in the US, Puerto Rico and Mexico.
Commenting on all three transactions, Longstreet said last week: “This outcome represents a successful result in our sale process and demonstrates the enduring value of Del Monte Foods’ brands and operations.
“These transactions will create an opportunity for our beloved brands and businesses to thrive under the ownership of three of the leading companies in the food industry.”
Del Monte Foods has been owned since 2014 by Del Monte Pacific, the Singapore and Philippines-listed food group.
Del Monte Pacific will continue to operate as a separate, independent entity.
