U.S. jam giant J.M. Smucker plans to shut its main Canadian jam and jelly plant in southern Quebec by the summer of 2013 as it consolidates its fruit spread business in its home town.
Smucker said in a release Wednesday it will spend US$150 million to build a new facility for its fruit spreads, ice cream toppings and syrups business at its home base of Orrville, Ohio, about 30 km southwest of Akron, and to add new equipment at its plant at Ripon, Wisc., southwest of Oshkosh.
The consolidation, which Smucker said will “significantly improve” its supply chain, means shutting its plant at Ste. Marie, about 50 km south of Quebec City in the province’s Beauce region. Another Smucker fruit spreads plant at Memphis, Tenn. will also close.
Once the Orrville plant is complete, Smucker said, production of its fruit spreads, syrups, and ice cream toppings for its consumer and foodservice businesses in the U.S. and Canada will “primarily be concentrated in Orrville and Ripon.”
Production is expected to be phased in at Orrville between the summer of 2012 and summer of 2013, at which time the Ste. Marie and Memphis plants will be closed, the company said. According to a report from Radio-Canada on Wednesday, the Ste. Marie plant’s closure will affect 65 employees.
Smucker took over the Ste. Marie plant in 1993 when it paid about $16 million for the fruit spreads division of Quebec-based snack and bakery firm Culinar, whose spreads included the Canadian regional brands Double Fruit, Vachon, Guest and Grenache.
Quebec dairy giant Saputo took over the rest of Culinar in 1999 and sold off Culinar’s cookie, soup and fine bread business to Dare Foods in 2001.
Smucker’s consolidation plans also include spending US$70 million to renovate its coffee plant at New Orleans, La., and handling all its coffee production there. It will then close its coffee plants at Sherman, Tex. and at Kansas City.
In all, Smucker said, these moves will cut its manufacturing facilities in North America from 22 down to 18. About 700 jobs, or 15 per cent of Smucker’s workforce, are to be cut.
Smucker has budgeted for restructuring charges of about US$190 million over five years with these moves, followed by about annual savings of about US$60 million.
“We are confident that this strategic decision is important for the long-term growth of the company,” co-CEO Tim Smucker said in the company’s release Wednesday. “However, it was difficult given the effect on employees, their families, and the communities related to the impacted facilities.”
However, co-CEO Richard Smucker added, “the significant investment we are making in our coffee and fruit spreads businesses will help us achieve our long-term financial objectives, strengthen our category leadership positions, and enable us to deliver even greater value to our consumers, customers, and shareholders.”
Along with the Double Fruit spread brand, Smucker’s Canadian brand portfolio includes Bick’s, Robin Hood, Red River, Five Roses, Carnation, Shirriff, Golden Temple and Europe’s Best.
Smucker’s U.S. brand portfolio, meanwhile, includes Crisco, Folgers, Smucker’s, Pillsbury, Jif, R.W. Knudsen, White Lily and Dunkin’ Donuts among others.