USA- Post Holdings, through its Post Consumer Brands division, has revealed plans to close its cereal manufacturing facility in Lancaster, Ohio, as part of a strategic move to optimize production capacity.
The Lancaster plant, which currently employs around 200 workers, is scheduled to cease operations by the end of September 2024, with production being relocated to other Post manufacturing locations.
The decision to close the cereal plant aligns with an industry-wide trend where food companies are reassessing and restructuring their manufacturing capacities. To enhance efficiency and reduce costs, various food makers, including Post, have been closing some facilities while opening new ones.
Post Holdings has been focusing on optimizing its production network to better serve customers and consumers with a diversified portfolio of products.
The Lancaster plant has been under the umbrella of Post Consumer Brands since June 2021 when Post acquired TreeHouse Foods’ ready-to-eat cereal business for US$85 million. The closure of the facility underscores the company’s commitment to refining its manufacturing footprint for long-term sustainability.
“This facility closure enables Post Consumer Brands to continue offering a diversified portfolio of great products at a great value,” Nicolas Catoggio, President and CEO of Post Consumer Brands, stated.
Post Holdings is currently in discussions with the union representing the employees at the Lancaster facility. The company anticipates incurring both cash and noncash pre-tax charges ranging between US$49 million and US$55 million as it transfers production to alternative facilities and manages the closure of the plant.
Despite the financial implications, Post remains committed to ensuring the continuity of its diverse product portfolio while making strategic decisions to align with market demands and consumer preferences.
Industry-wide trend and Post’s strategy
The closure of the Lancaster plant is part of a broader industry trend where food and beverage manufacturers are closing older, less efficient facilities and investing in new, advanced locations.
Post Holdings, known for brands such as Honey Bunches of Oats and Pebbles, is no exception, having announced plans last year to spend up to US$110 million to expand its cereal production capacity at a Nevada facility serving the West Coast.
This strategic move is expected to provide Post with additional production volume, address capacity constraints, and enhance its ability to meet consumer demand efficiently while reducing transportation costs.
As Post Holdings navigates these changes, the company remains focused on adapting to market dynamics, optimizing its production network, and ensuring its ongoing commitment to delivering high-quality products to consumers.
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