Chiquita Restructuring Aims to Cut Costs, Boost Strategy
CINCINNATI - Chiquita Brands International here said it is cutting management and production jobs, closing facilities and exiting some businesses as part of a plan to reduce costs by $60 million to $80 million annually.
"While we have already taken various actions to strengthen our balance sheet, improve our risk profile and diversify the company, we continue to endure rising industry costs, punitive European banana import regulations and a slower-than-expected recovery in the value-added salads category," said Fernando Aguirre, Chiquita's chairman and c.e.o.
Although it will take a $25 million charge for severance packages and write-downs this quarter, Chiquita said the benefits of the strategy will begin to appear in 2008.
Chiquita said it will eliminate 160 management jobs worldwide, or a 21 percent reduction at the three highest levels, and will simplify an organizational structure that will be realigned by geography instead of product line.
The grower-shipper also said it will discontinue its fresh-cut fruit bowl line and will convert plants in Edgington, Ill., and Salinas, Calif., to focus on producing and distributing salads and healthy snacks, such as Chiquita Apple Bites, which the company said has achieved market share leadership and wide acceptance from both retail customers and consumers.
The conversion will result in the elimination of 130 jobs. The company also plans to close a distribution center in Greencastle, Pa., and a production facility in Carrollton, Ga., which collectively employs 280 workers, over the next several months as part of its salad business reorganization.
Chiquita also said it is exploring alternatives, including a possible sale, of its German fruit and vegetable distributor Atlanta AG that has annual sales topping $1 billion, while also planning to close a banana distribution center in Bradenton, Fla., that will eliminate 15 jobs.
Chiquita, a leading international marketer and distributor of bananas and other fresh fruits and salads, employs about 25,000 people in more than 70 countries.
"While we have already taken various actions to strengthen our balance sheet, improve our risk profile and diversify the company, we continue to endure rising industry costs, punitive European banana import regulations and a slower-than-expected recovery in the value-added salads category," said Fernando Aguirre, Chiquita's chairman and c.e.o.
Although it will take a $25 million charge for severance packages and write-downs this quarter, Chiquita said the benefits of the strategy will begin to appear in 2008.
Chiquita said it will eliminate 160 management jobs worldwide, or a 21 percent reduction at the three highest levels, and will simplify an organizational structure that will be realigned by geography instead of product line.
The grower-shipper also said it will discontinue its fresh-cut fruit bowl line and will convert plants in Edgington, Ill., and Salinas, Calif., to focus on producing and distributing salads and healthy snacks, such as Chiquita Apple Bites, which the company said has achieved market share leadership and wide acceptance from both retail customers and consumers.
The conversion will result in the elimination of 130 jobs. The company also plans to close a distribution center in Greencastle, Pa., and a production facility in Carrollton, Ga., which collectively employs 280 workers, over the next several months as part of its salad business reorganization.
Chiquita also said it is exploring alternatives, including a possible sale, of its German fruit and vegetable distributor Atlanta AG that has annual sales topping $1 billion, while also planning to close a banana distribution center in Bradenton, Fla., that will eliminate 15 jobs.
Chiquita, a leading international marketer and distributor of bananas and other fresh fruits and salads, employs about 25,000 people in more than 70 countries.