TreeHouse Foods, Inc. have announced its intention to close its remaining operations in Battle Creek, Michigan. In November 2016, TreeHouse announced its initial decision to downsize the Battle Creek facility. Following completion of the first phase of downsizing, it was determined that the remaining operations would not be economically viable. Current production at Battle Creek will be moved to other TreeHouse cereal manufacturing facilities.
The decision is consistent with the August 2017 announcement of TreeHouse 2020, the Company’s restructuring program. TreeHouse 2020 is a multi-year plan to fully integrate the business and reduce its cost structure in order to invest in market-differentiated capabilities that will serve the rapidly evolving needs of its customers who are strategically focused and highly committed to their corporate brands.
The Battle Creek facility produces ready-to-eat cereal. The closure of remaining operations will affect approximately 84 employees by the fourth quarter of 2018. The decision is being announced well in advance of the closure in order to provide employees with as much notice as possible and to ensure a seamless transition for customers.
The costs to close the remainder of the Battle Creek facility are expected to be approximately $30 million of which approximately $20 million is expected to be in cash. Components of the charges include non-cash asset write-offs of approximately $10 million, employee-related costs of approximately $2 million and other closure costs of approximately $18 million. The Company expects charges of approximately $0.38 per fully diluted share to be incurred in 2018.