Bay Valley Foods, a wholly-owned subsidiary of Illinois-based food processing company TreeHouse Foods, intends to shut down its Ayer facility in Massachusetts, the US.
The facility, which currently has 100 employees, is expected to stop production in the first quarter of next year, while the plant will close completely in the third quarter of the same year.
The Ayer manufacturing plant mainly produced regionally branded and private label spoonable dressings.
As a result of its ongoing manufacturing network analysis, Bay Valley Foods has decided to close the facility in order to maintain desired service levels, competitive costs and product quality.
After the closure of the Ayer facility, its production work will be shifted to other manufacturing units within Bay Valley's existing production network.
The company expects to supply its products without any disruption even during the transition.
The total facility closure costs are expected to be nearly $6.5m, or $0.07 per fully diluted share.
Of the total $6.5m, about $5.3m, or $0.06 per fully diluted share, is expected to be in cash.
The primary components of the costs include non-cash asset write-offs that amount to nearly $1.2m, while employee-related costs are expected to be approximately $2.2m and about $3.1m will have to be spent for other costs related to the closure of the Massachusetts facility.
Bay Valley Foods, which supplies shelf stable foods, food service goods and private label products, expects to incur nearly $1.3m in charges in each of the second, third and fourth quarters of this year.
TreeHouse Foods is a producer of packaged foods and beverages with over 50 manufacturing units across the US, Canada and Italy.
