Kraft Foods Inc. (NYSE: KFT), a global leader in branded foods and beverages, Friday (12 October) announced an agreement to sell the assets of its dairy business in Brazil to Parmalat.
The sale, which is expected to close by the end of November, includes the Gloria and Avare brands and the manufacturing facilities in Cerqueira Cesar, Itaperuna, and Jaragua do Sul, all of them located in Brazil. The dairy business, with close to 600 employees, had sales of R$175.4 million (US$63 million) in 2000. Terms of the agreement were not disclosed.
In a separate action, Kraft also announced an agreement to sell its Pilar pasta and biscuit business in Brazil to two privately held companies in that country. That sale, which is expected to close in the next several weeks, includes a manufacturing facility located in Recife, Brazil. The Pilar business had sales of R$45 million (US $17 million) in 2000. Terms of the agreement were not disclosed.
“We remain totally committed to the growth of our business in Brazil,” said Mr. Joachim Krawczyk, Group Vice President, Kraft Foods International and President of Kraft’s Latin America Region. “The sale of the Gloria and Pilar businesses will enable us to focus on the growth of our core categories in this critical market.”
Kraft also announced plans to close three manufacturing plants in Latin America as part of its ongoing integration of Kraft Foods and Nabisco operations. The plants to be closed include a biscuit and dry mix plant in Montevideo, Uruguay; a biscuit facility in Lasso, Ecuador; and a dry mix plant in Maipu, Chile. Production from these facilities will be integrated into existing plants with available capacity elsewhere in Latin America. The plant in Chile is scheduled for closure at the end of December 2001, with the Ecuador plant closing by mid-2002 and the Uruguay facility closing by the end of 2002. Approximately 500 positions will be affected by these closures.
“After evaluating all aspects of our Latin American businesses, we have chosen to consolidate production within existing facilities for certain product categories, resulting in the closure of these plants,” said Mr. Krawczyk. “We are working to ensure a smooth transition for our affected employees, who will receive fair and comprehensive separation packages and job search assistance.”
Kraft Foods is the largest branded food and beverage company headquartered in the United States and the second largest worldwide. Kraft Foods markets many of the world’s leading food and beverage brands – – including Kraft cheese, Jacobs and Maxwell House coffees, Nabisco cookies and crackers, Philadelphia cream cheese, Oscar Mayer meats, Post cereals, and Milka chocolates – – in more than 140 countries.
For more information about Kraft Foods visit our website at www.kraft.com