Campbell Enters into Agreements to Expand Its Production and Distribution Capabilities in Mexico
February 14 2013 - 4:30PM
Business Wire
Campbell Soup Company (NYSE:CPB) announced today
that it has entered into commercial arrangements with Grupo Jumex
and Conservas La Costeña that will expand the company’s access to
manufacturing and distribution capabilities in Mexico for its
beverages, soups, broths and sauces.
Grupo Jumex, the largest producer of fruit juices and nectars in
Mexico, will manufacture and distribute Campbell’s “V8” portfolio
throughout the Mexican market. Conservas La Costeña, one of the
largest producers of prepared foods in the country, will
manufacture and distribute “Campbell’s” soups, broths and Italian
sauces. Under the terms of its agreements with each partner,
Campbell will retain responsibility for consumer marketing, product
research and new product development. Financial terms were not
disclosed.
Denise Morrison, Campbell’s President and Chief Executive
Officer, said, “We are delighted to be working with Grupo Jumex and
Conservas La Costeña – outstanding companies with long and
distinguished histories – in a market that offers Campbell exciting
avenues for growth. Our arrangements with these new partners will
increase our access to customers and enable us to reach new
consumers for our products. We believe that they will redefine the
scope of our business opportunities in Mexico.”
Mexico is a growing market with more than 112 million people.
Annual sales of non-carbonated beverages in Mexico are at $3.5
billion today, and are currently growing at approximately 6 percent
per year. Campbell’s beverage business constitutes the largest part
of the company’s portfolio in Mexico and has grown steadily over
the past several years.
Currently, Campbell employs approximately 330 people in Mexico.
As a result of entering into these agreements, Campbell will close
its plant in Villagrán, Mexico, and eliminate approximately 260
positions. The company plans to retain approximately 70 positions
in R&D, sales, supply chain, marketing and general management.
Production from the Villagrán facility will be transitioned to
Grupo Jumex and Conservas La Costeña facilities in phases through
September 2013. Campbell anticipates that it will record a
restructuring charge of $9 million ($6 million after tax) related
to this initiative, most of which will be incurred in the second
quarter of fiscal 2013.
“We would like to recognize our employees in Mexico for their
significant contributions to our business. Campbell is committed to
helping them work through this transition,” said Humberto
Ibarzábal, Campbell’s President-Latin America.
About Campbell Soup Company
Campbell Soup Company is a manufacturer and marketer of
high-quality foods and simple meals, including soup and sauces,
baked snacks and healthy beverages. Founded in 1869, the company
has a portfolio of market-leading brands, including "Campbell's,"
"Pepperidge Farm," "Arnott's," "V8" and "Bolthouse Farms." Through
its corporate social responsibility program, the company strives to
make a positive impact in the workplace, in the marketplace and in
the communities in which it operates. Campbell is a member of the
Standard & Poor's 500 and the Dow Jones Sustainability Indexes.
For more information, visit www.campbellsoupcompany.com.
Forward-Looking Statements
This release contains “forward-looking statements” that reflect
the company’s current expectations about the impact of its future
plans and performance on sales, earnings, and margins. These
forward-looking statements rely on a number of assumptions and
estimates that could be inaccurate and which are subject to risks
and uncertainties. The factors that could cause the company’s
actual results to vary materially from those anticipated or
expressed in any forward-looking statement include (1) the impact
of strong competitive responses to the company’s efforts to
leverage its brand power in the market; (2) the risks associated
with trade and consumer acceptance of the company’s initiatives;
(3) the company’s ability to realize projected cost savings and
benefits; (4) the company’s ability to manage changes to its
business processes; (5) the increased significance of certain of
the company’s key trade customers; (6) the impact of fluctuations
in the supply or costs of energy and raw and packaging materials;
(7) the impact of portfolio changes, including the Bolthouse Farms
acquisition; (8) the uncertainties of litigation; (9) the impact of
changes in currency exchange rates, tax rates, interest rates, debt
and equity markets, inflation rates, economic conditions and other
external factors; (10) the impact of unforeseen business
disruptions in one or more of the company’s markets due to
political instability, civil disobedience, armed hostilities,
natural disasters or other calamities; and (11) other factors
described in the company’s most recent Form 10-K and subsequent
Securities and Exchange Commission filings. The company disclaims
any obligation or intent to update the forward-looking statements
in order to reflect events or circumstances after the date of this
release.
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