Archive for Thursday, February 18, 1999

T BE CERTAIN UNTIL LATER THIS YEAR.

February 18, 1999

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H.J. Heinz Co. said Wednesday it was closing or selling as many as 20 factories and slashing up to 10 percent of its work force, but it appears the company's pet food plants in Lawrence and Topeka will be spared.

The cuts in Heinz's global operations will take place over the next four years, the Pittsburgh-based company said, and include selling off its Weight Watchers diet classes. Heinz also will "downsize" at least 10 factories and expand about 15 others to help centralize manufacturing. It's the company's second restructuring in two years.

Under the plan announced to investment analysts at a meeting in Naples, Fla., Heinz will concentrate on six core food categories, including Heinz ketchup, StarKist tuna -- and pet products.

The company did not say where the 4,000 layoffs would be made, or which of its 100 plants would be closed or expanded. Those details will become available over the next year, a spokesman said.

But Michael Mullen of Star-Kist Foods said Wednesday's announcement was "a positive story" for the pet food plants. Star-Kist is the parent company of Heinz Pet Products.

"Since pet products is one of the core categories, and Heinz has made a statement that it intends to invest in the core categories, that's a positive for pet products," Mullen said. "I think it's a positive story for the pet food business."

Heinz said its pet products business would be led partly by Kibbles `n Bits, which is made only at the Lawrence plant. It also named 9-Lives, Pounce and Pup-Peroni, products made in Topeka.

Heinz purchased the Lawrence and Topeka plants in 1995 from Quaker Oats Co. Together, they employ about 350 people.

Debbie Foster of H.J. Heinz said the company's plan was simply to give its pet products lines a "bit more TLC," mainly by spending more on marketing. Late last year, Heinz acknowledged it was disappointed by dwindling pet food sales.

"Our hope is that we will be able to increase the volume of Kibbles `n Bits that we sell by 3 or 4 percent a year," Foster said.

The company said much of the restructuring would take place in Europe, where closure or sale of one-third of the company's 21 factories has been proposed.

Heinz will now focus on six core food categories and six key countries: the United States, Britain, Italy, Canada, Australia and New Zealand. The categories are ketchup, condiments and sauces; frozen foods including Ore-Ida, Bagel Bites and Smart Ones; tuna; soups, beans and pasta meals, led by the Heinz and Wattie's brands; infant foods; and pet products.

-- Richard Brack's phone message number is 832-7194. His e-mail address is rbrack@ljworld.com.

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