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May 26, 2011

GLOBAL: Heinz to “exit” five sites in supply-chain revamp

HJ Heinz is to "exit" five production facilites across Europe, the US and the Pacific region under a revamp of its supply chain and manufacturing network.

By Dean Best

HJ Heinz is to “exit” five production facilites across Europe, the US and the Pacific region under a revamp of its supply chain and manufacturing network.

The moves have been designed to “increase manufacturing efficiency and accelerate productivity on a global scale”, said chairman, president and CEO Bill Johnson, and will lead to the loss of 800 to 1,000 jobs today (26 May).

The ketchup maker will “exit” two facilities in Europe, including one in Miedzychod in Poland, a move that a spokesman for Heinz UK and Ireland said was announced last month.

Heinz has yet to decided on the location of the second European factory. The spokesman said the company was “evaluating potential options” but insisted no decision would be taken until talks with work councils, unions and employees took place. “Until then it would be wrong to speculate on any location,” the spokesman said.

However, reflecting on the reasons for the shake-up, he claimed Heinz needed to “provide the fuel for sustained growth and investment”.

“Heinz will drive productivity to partially offset rapidly rising commodity costs and to become even more competitive in a challenging business environment,” he added.

In Europe, Heinz’s plans involve creating a European supply chain “hub” in The Netherlands. The company said it wanted to “consolidate and centrally lead procurement, manufacturing, logistics and inventory control” at the facility.

The global programme, taking in the “exiting” of the unnamed plants in the US and the Pacific, will cost Heinz around $160m.

The announcement came on the day that Heinz announced “record” annual sales and profits.

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