Del Monte’s US units cutting two plants
MANILA, Philipines — Canned food giant Del Monte Pacific Ltd. registered a $50.6-million net loss in the first nine months of its fiscal year that began in May 2023, reversing from a net profit of $28.9 million in the same period the previous year, due to lower sales and global economic uncertainty.
In the third quarter, which covers November to January, Del Monte Pacific generated sales of $646.7 million, down by 5 percent on the back of lower sales seen by Del Monte Foods Inc. (DMFI) in the United States and lower exports of packaged pineapple by Del Monte Philippines Inc.
The 6-percent decline in DMFI’s sales at $466.4 million was due mainly to the company’s “strategic shift” away from lower-margin co-pack products that it packs for other manufacturers, along with lower canned fruit and vegetable sales.
The Philippine market, meanwhile, delivered $107.4 million in sales, lower by 4 percent as the emergence of new juice drink brands pulled down beverage sales.
As higher costs take a toll on earnings, Campos-led Del Monte Pacific said it planned to close two vegetable plants of its subsidiary in the United States and rightsize its workforce to cut losses.
READ: Del Monte Pacific lays down plan to cut debts by P10B
In a stock exchange filing on Tuesday, Del Monte Pacific said closing the DMFI Wisconsin and Washington vegetable plants would lower fixed costs and improve margins.
Rightsizing
DMFI will likewise consolidate its green beans volume from Wisconsin to another plant, it said.
“DMFI is also rightsizing its workforce to reduce the G&A (general and administrative) cost of the business,” Del Monte Pacific added without indicating further details.
The company also said it would focus on reducing its inventory to lower operating costs to regain profitability.
“We expect that consumer spending will continue to be affected by inflation and high living costs. The group is focused on navigating through these challenges,” said Del Monte Pacific managing director and CEO Joselito Campos Jr.
In the fiscal year 2025, Del Monte Pacific said it would “continue to correct the inventory by reducing the aggregate pack plan across all categories by over 30 percent.”
“The group recognizes the uncertainty in the global environment and is committed to effectively managing its operating expenses,” Del Monte Pacific said in its disclosure. INQ
