Chiquita Brands International Inc has outlined a restructuring plan and management changes designed to accelerate its strategy to become the global leader in healthy, fresh foods.
As a result of these changes, the company expects to generate new, sustainable cost reductions of approximately $60 million to $80 million annually, beginning in 2008, after a one-time charge of about $25 million in the fourth quarter 2007 related to severance costs and asset write-downs.
Chiquita has simplified its organizational structure and realigned it by geography, rather than product line. The company is making several additional structural changes that will take place over the next several months:
•Network optimization in North American salads—The company’s recent acquisition of the Verdelli Farms production facility in Harrisburg PA will allow Fresh Express to rebalance its production and distribution network for salads. The company has decided to close its distribution center in Greencastle PA and production facility in Carrollton GA over the next several months.
•Exit from United States fruit bowl business—Chiquita has reviewed its fresh-cut fruit business and has decided to focus on its line of healthy snacks. The company will convert facilities in Edgington IL and Salinas CA to focus on the production and distribution of salads and healthy snacks.
•Closure of Bradenton FL banana distribution facility—Closing this facility by year-end will reduce operating costs and is not expected to impact current customers, which will continue to be served from the company’s distribution center at Port Everglades FL.
•Exploring strategic alternatives for Atlanta AG—The company has launched a process to explore strategic alternatives for this unit, including a possible sale. Chiquita has retained Taylor Companies Inc, a Washington DC-based investment bank specializing in synergistic mergers and acquisitions.
