Del Monte Pacific divests four US facilities in shift towards asset-light strategy
22 Aug 2019 --- Del Monte Pacific Limited (DMPL) has announced its plans to move to an asset-light strategy and divest production facilities of US subsidiary Del Monte Foods. Facilities to be closed are located at Sleepy Eye, Minnesota; Cambria, Wisconsin; and Mendota, Illinois. Production will cease at these facilities at the end of the current pack season. The company will also be selling manufacturing assets at its Crystal City, Texas facility and intends to transfer production at this site to outside locations later this year. Financial terms and buyers of the facilities have not been disclosed.
Production at these locations will be primarily transitioned to other Del Monte production facilities in the US, the company states. “This decision has been difficult and has come after careful consideration. This restructuring is a necessary step for us to remain competitive in a rapidly changing marketplace. Our asset-light strategy will lead to more efficient and lower cost operations,” says Joselito D Campos Jr, Managing Director and CEO, Del Monte Pacific Limited.
The manufacturing plants to be sold are among ten US-based facilities owned by Del Monte Foods, responsible for the production of the brands Fruit Naturals, Orchard Select, SunFresh and Fruit Refreshers. In addition, the company owns two plants in Mexico.
Turnover of DMPL slipped 11 percent to US$1.95 billion from the previous year.
DMPL is listed on both the main board of the Singapore Stock Exchange and the Philippine Stock Exchange. The company has made significant moves to raise money to prepay or repay the group’s existing debt.
Previously, the company sought to raise money to repay the group’s existing debt, postponing its PHP13.5 billion (US$257.9 million) initial public offering (IPO) of local unit Del Monte Philippines, due to market volatility.
Edited by Benjamin Ferrer
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