Kraft Heinz to invest in plant

Kraft Heinz to invest in plant

Upstate Niagara Cooperative, a US dairy farmer co-op, has bought Kraft Heinz's New York state-based cheese factory that had been at risk of closure.

Earlier this year, Kraft Heinz indicated that it planned to close the struggling plant in Campbell and lay off the 330 workers but state and federal officials intervened, exerting pressure on the food company to find a buyer and to save as many jobs as possible.

Upstate Niagara pledged to retain at least 125 workers who were at risk of losing their jobs with the plant's threatened closure.

"This agreement gives the facility a new lease of life, where it will continue to be an economic engine and major employer in the Campbell community for years to come," New York State Governor Andrew Cuomo said in a statement. "Make no mistake; the plant was in real danger of closing, which would have been devastating locally and caused ripple effects across the entire region and New York's dairy industry."

Under the terms of the deal, "at least" 125 jobs will be retained in Campbell, with worker numbers likely to increase to 150 within a year, according to a statement from Kraft Heinz. The two companies have also signed a long-term co-packing agreement.

Michael Mullen, Kraft Heinz's SVP of corporate and government affairs, said customers would experience "zero disruption" in their service. In addition, Kraft Heinz has committed an ongoing investment of between US$3-5m to maintain and improve the Campbell facility, which produces Polly-O String cheese, mozzarella and other Italian cheeses.

The deal is expected to be completed within the next 30 to 60 days.

"We look forward to adding the Campbell cheese facility to our organisation in the coming weeks," Larry Webster, CEO of Upstate Niagara Cooperative, said. "As a dairy cooperative owned by farm families throughout the region, this acquisition is an investment by our member owners towards continued and long-term growth for our cooperative and the Campbell facility. We are proud to be able to keep manufacturing jobs within the community while offering additional products and manufacturing capabilities to our customers."

Kraft Heinz has been considering the future of its cheese plant since the two food giants merged in March 2015. In November of that year, Cuomo and Senator Charles Schumer devised a deal to keep three other New York state Kraft Heinz plants open, saving nearly 1,000 jobs in the process.