Bay Valley Foods, a wholly-owned subsidiary of TreeHouse Foods, intends to close its City of Industry, California, facility. Oak Brook, Illinois-based TreeHouse says the closure of the facility was determined after carefully reviewing the operation and identifying opportunities to lower production costs. Production is expected to cease in the first quarter of 2016 with full closure of the facility expected in the third quarter.
The City of Industry facility has approximately 62 employees and primarily produces branded liquid non-dairy creamer and refrigerated dressings for the food-away-from-home industry. Production will be moved to other manufacturing facilities within the company’s existing network as well as to third-party facilities. The company expects no supply disruptions during the transition.
Total costs to close the facility are expected to be approximately $11.9 million, or $0.17 per fully diluted share, of which approximately $7.7 million, or $0.11 per fully diluted share, is expected to be in cash. Components of the charges include non-cash asset write-offs of approximately $3.7 million, employee-related costs of approximately $2.8 million and other closure costs of approximately $5.4 million. The company expects approximately $1.1 million of the charges to be incurred in the fourth quarter of this year and approximately $2.1 million, $4.9 million and $3.8 million in the first, second and third quarters of 2016, respectively. Ongoing annual cost savings from the closing are expected to be approximately $1.0 million.