Two European factories on Heinz hit list

By Graham Holter

- Last updated on GMT

Related tags Europe United kingdom Heinz

Two European factories on Heinz hit list
Heinz has declined to comment on whether a UK factory could be among two production plants in Europe earmarked by the company for closure.

The Pittsburgh-based corporation operates five factories in the UK, including the Kitt Green facility near Wigan, which it claims is Europe’s largest food manufacturing site. It also has sites in Telford, Worcester, Westwick, Kendal, and another in Dundalk, Ireland.

Efficiency drive

In its annual results for 2010/11 released last week, Heinz said international sales in the 12 months to April 27 grew 2% to US $10.7bn (£6.49bn) with net income up 14.4% to US $990m (£600m). But chief executive William Johnson said $160m (£97m) needed to be spent on a global efficiency drive.

“The plan includes exiting five factories, including two in Europe, two in the United States, and one in the Pacific, leaving Heinz with 76 factories globally,”​ he said.

“Overall, Heinz will streamline its global workforce by approximately 800 to 1,000 positions. Certain projects included in the plan are subject to consultation and any necessary agreements being reached with appropriate employee representative bodies, trade unions and works councils as required by law.”

Rising input costs

A Heinz UK spokesman told the move was intended to “drive productivity to partially offset rapidly rising commodity costs, and to become even more competitive in a challenging business environment”.

He added: “We need to provide the fuel for sustained growth and investment. Our plan includes exiting one factory in Poland, which is our Miedzychod factory, which we announced in April this year. We are evaluating potential options elsewhere in Europe.”

The spokesman said it “would be wrong to speculate on any location”​ until Heinz had entered discussions with employees – of whom there are 3,000 in the UK and Ireland – and their unions.

As part of the plans, Heinz will establish a European supply chain hub in the Netherlands to “consolidate and centrally lead procurement, manufacturing, logistics and inventory control”.

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