Bonduelle, the France-based vegetable products supplier, has announced it is to merge two manufacturing plants on the east coast of the US.
The manufacturing activities at its facility in Florence, New Jersey, will be merged in the coming months with the Swedesboro site in the same state.
The current Florence plant will be converted into a warehouse. Bonduelle said jobs will be maintained on the site but Florence production workers will alternatively be offered a position in Swedesboro.
Explaining the decision, announced in commentary surrounding its half-year 2022-23 results yesterday (1 February), Bonduelle said: “This operation aims to optimise the production of all products for customers nationally, while achieving gains in efficiency and coverage of fixed costs.”
Bonduelle’s group revenue for the period increased by 6.1% year-on-year to EUR1.24bn (US$1.36bn) but its non-Europe zone revenue was down by 3.4%.
The company said: “The ready-to-use fresh segment [in North America] declined over the period, impacted on the one hand by the loss of contracts in the second half of financial year 2021-2022, by a salad segment that was itself in decline, and on the other hand by an agronomic crisis affecting salad yields in the Salinas region, generating a significant shortage of products and a rise in purchase prices.”
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It said this situation had informed its decision to adapt its manufacturing set up on the east coast to the expected level of activity moving forward and to refocus its attention on “profitable business segments”.
It said the financial impact of this reorganisation will be recorded in the 2022-2023 fiscal year under non-recurring items.
Last summer, Bonduelle adjusted downwards its revenue and margin expectations for its financial year, partly blaming the performance of its North American unit.
It said then the “difficulties encountered by the Bonduelle Fresh Americas business unit [have] lead the group to review its medium-term profitability prospects”.
In May, the company revealed it had entered into exclusive negotiations with two Canadian institutional investors for the partial sale of its Bonduelle Americas Long Life (BALL) business.
Bonduelle negotiated with Montreal-based Fonds de solidarité FTQ and Quebec’s Caisse de dépôt et placement du Québec (CDPQ) about a deal to sell 65% of the business for CAD850m (US$660.5m at the time).
In June, Bonduelle announced it had obtained approval from the US and Canadian regulatory authorities, allowing it to finalise the deal.
Looking to the future, Bonduelle said yesterday that it believes its growth and profit for the financial year will “remain dependent both on the dynamics of consumption, which are difficult to predict, and on price increases, once again essential to compensate changes in certain components of the cost price, in particular agricultural materials”.