ConAgra Announces Further Streamlining Plans

18/09/06 ConAgra Foods, Inc. has provided more details on its effort to streamline its manufacturing operations.

Last March, ConAgra Foods announced it would close several plants as part of its overall strategy to achieve long-term, profitable growth. Nos, the company is providing an update on plant closures, announcing the planned construction of a new regional manufacturing operation and communicating a redistribution of work among ConAgra Foods plants. Collectively, these actions will help streamline operations, reduce operating costs, improve capacity utilization and improve gross margins.

The operational changes announced today are expected to occur over the next 12 to 18 months, include five closures and result in a workforce reduction of approximately 400 employees. The initial changes announced today are part of the company's previously announced restructuring program; additional plant rationalization will be announced as the program continues. By fiscal 2009, the company expects total plant rationalization efforts under the program to result in a $100 million reduction in annual fixed costs.

Today's announcement includes:
• ConAgra Foods plans to construct a new facility in Forth Worth, Texas, upon approval of local tax incentives, to absorb some redistributed volume of canned bean, chili and pasta products from six facilities: Trenton, Mo., Newport, Tenn., Milton, Pa., Oakdale, Calif., Archbold, Ohio and an existing Fort Worth location. Plans call for the Archbold and current Fort Worth locations to close.
• ConAgra Foods' tomato paste production facility in Helm, Calif., will operate on a seasonal basis only, and other product volumes will transfer to Oakdale, Calif.
• The company's Memphis, Tenn., plant will discontinue production of plastic containers used for vegetable oil products, and use a third-party supplier.
• The company's Waterloo, Iowa, pudding plant will expand and absorb production from Rossford, Ohio, which will close. The Menomonie, Wis., pudding facility will also absorb pudding production from Rossford.
• ConAgra Foods' Folcroft, Penn., snack plant will close; production will shift to Milton, Pa., and Garner, N.C., snack locations.
• The company's taco shell production facility in Laval, Quebec, will close, marking ConAgra Foods' exit from this business.

"Our rationalization initiatives are designed to result in improved efficiencies and fixed cost savings that align with our strategy of strengthening long-term operating performance," said Gary Rodkin, ConAgra Foods chief executive officer. "This is another key element in achieving a more efficient cost structure that will fuel growth by allowing more focused investments in marketing and innovation."