Cereal giant Kellanova today (8 February) set out plans to close two factories as part of efforts to drive efficiency and increase productivity.
The company is planning to close one plant in North America and one factory in Europe.
Go deeper with GlobalData
In a stock-exchange filing, the Kellogg’s brand owner said it would shut the North America facility by the end of 2024.
Kellanova said it wanted to reorganise its frozen supply chain network in North America to improve the productivity of its operations in the market.
In the filing, the group said cost savings from the move would begin “to contribute to gross margin improvements in the second half of 2024” and reach “full-run rate in 2025”.
See Also:
Kellanova, which announced the closures alongside its 2023 financial results, will shift production to “facilities across the Americas frozen network” to meet “volume requirements”.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataMeanwhile, the US giant said it proposed to close a UK factory by the end of 2026.
In a statement sent to Just Food, Kellanova said it has started formal discussions with its employees and union representatives about the closure of its factory in Greater Manchester.
The consultation period is expected to last “around 90 days”.
The move puts 360 jobs at the Trafford Park facility “at possible risk”.
The UK plant produces Corn Flakes, Rice Krispies and Coco Pops for retailers in the country and in Ireland.
The facility’s workers are represented by Usdaw, the union.
Mick Murray, Usdaw area organiser said that the union “will now enter into meaningful consultation talks with the company, where [it] will interrogate [its] business case and seek the best possible outcome for staff impacted by the proposed closure”.
“We are providing our members with the support, advice and representation at this difficult time,” said the employee organisation.
The company cited the “age of the almost 90-year-old facility”, together with the large amount of “redundant space in its buildings”, as reasons for considering a closure.
Chris Silcock, Kellanova’s UK managing director, said the company “can’t currently see a long-term future for [its] Trafford Park factory”.
Silcock said the layout of the facility is outdated and “investment required to maintain the factory in the coming years is simply not viable”.
“You can’t escape the fact the site opened in 1938,” he added.
“It’s laid out in a way that made sense in the 1930s, with food travelling up and down six floors to be made”.
Kellanova said 520 jobs will “stay in Greater Manchester as the company recommits to its MediaCity office in Salford”. The company has its UK headquarters in MediaCity.
The business’ cereal factory in Wrexham in Wales and its distribution centre in St Helens in England are not affected by the proposed move.
