The Kraft Heinz Co. has declined to comment on reports that it is preparing to shed 150 jobs in Columbia, Missouri, as the group prepares to invest in upgrading equipment at the site, which manufactures Oscar Mayer hot dogs.
Kraft Heinz has reportedly applied for a 75% property tax break for ten years on equipment and infrastructure added to the plant as part of a US$114m investment. According to a report in the Columbia Daily Tribune, Kraft Heinz met with the Columbia Board of Education and the Boone County Library Board in an attempt to secure their support on the Chapter 100 Taxing District Review Panel.
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According to the Tribune, the investment includes a 25,000 square foot extension to the facility as well as automated machinery. The new equipment is expected to enable the company to reduce the site's headcount from the current 500 staff to 350 personnel.
A spokesperson for Kraft Heinz said: "We have no comment."
Private equity owned-Heinz completed a merger with Kraft this month that created the third-largest food and beverage company in North America, and the fifth-largest food and beverage company in the world.
Warren Buffett's Berkshire Hathaway and private-equity firm 3G Capital, which collectively hold a controlling stake in the combined group, spent the months following their Heinz takeover focused on lowering the ketchup maker's cost base. Heinz revealed 2014 adjusted EBITDA increased by nearly 35%, reflecting higher gross margin and lower SG&A costs. This was primarily driven by efficiencies from productivity initiatives and zero-based budget cost control.
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By GlobalDataThis focus looks set to continue: according to the plans for Kraft Heinz announced back in March, management expect to generate $1.5bn in run-rate annual cost savings by 2017.
