Kraft Heinz plant sold
Parmalat to buy Ingleside facility
INGLESIDE — Kraft Heinz will no longer own the cheese plant in Ingleside after the company sells the facility and transfers the 400 employees who work there over to Parmalat SpA as part of a $1.62-billion deal for its Canadian natural cheese business.
The deal is expected to close in the first half of 2019.
The Standard-Freeholder reached out to the manager of the Ingleside plant, Pranav Shah, seeking any further information on how the change in ownership might affect the facility’s employees and operations, but he said he could not add anything more than what the company has already made public about the deal.
Mayor-elect of South Stormont Bryan McGillis said everything he has seen about the deal indicates it will be a continuation of the status quo as far as the township is concerned, which is a good thing.
“I’m glad to see someone is taking it over. We’re talking about 400 good jobs for this community, plus all the spinoff for the other industries that have been doing business with Kraft Heinz,” said McGillis. “I think everything will be alright, it all looks good ... Kraft Heinz has been a good corporate citizen for us for many years, and I hope that Parmalat will be the same.”
The money from the deal with Parmalat will allow Kraft Heinz to trim its debt while, on the flipside, the sale is an opportunity for Parmalat’s parent company, Lactalis, to extend its North American footprint. The deal comes a month after the new United States-Mexico-Canada Agreement (USMCA) was signed, under which Canada partially opened its protected domestic market to the United States.
“We’re excited about what this transaction means for our future growth and business in Canada,” said Bernardo Hees, Chief Executive Officer of Kraft Heinz in a statement. “We also believe Parmalat is uniquely positioned to advance the natural cheese business given their experience and focus on the dairy industry. At the same time, we can focus on the segments and categories where we have stronger brand equity, competitive advantage and greater growth prospects.”
The cheese business being sold by Kraft, which includes brands like Cracker Barrel, P’tit Quebec and aMOOza, generated about $560 million in net sales in 2017, Kraft and Parmalat said in statements on Tuesday.
The transaction followed a competitive bidding process, Parmalat said.
The U.S. food group will continue to own and market other cheese products, including Philadelphia, Cheez Whiz and Kraft Singles, which are processed in Quebec.
RBC Capital Markets served as the exclusive financial advisor to Kraft Heinz Canada, while Fasken Martineau DuMoulin LLP served as legal advisers.
Parmalat said the activity will reinforce its century-old Canadian business that already comprises 3,000 employees and 16 dairy processing plants, helping to secure jobs and farm revenue.
The revised North American trade deal has irked Canadian farmers who see a threat to the country’s supply management system, but the agreement may bring limited gains for U.S. producers.
Parmalat’s acquisition in Canada marks a further addition to the North American footprint of France’s Lactalis, the world’s largest dairy firm that controls nearly 90 per cent of Parmalat.
The deal would reinforce its presence “in the strategic market for cheese with high added value in Canada,” Lactalis said in a separate statement on Wednesday.
Lactalis has in the past year struck deals to acquire U.S. organic yogurt brand Stonyfield, previously owned by fellow French group Danone, and agreed to buy siggi’s, a U.S.-based maker of Icelandic yogurt.
In another overseas acquisition, Lactalis last month agreed to buy the infant formula business of Aspen Pharmacare, in a move to revive its baby milk after a health scandal in its home market.
A salmonella outbreak at its sole infant formula production site in northwest France last year caused dozens of babies to fall sick and led to a global product recall.
Natural cheeses can include unripened cheeses such as cottage cheese, soft cheese such as Camembert or hard cheeses such as Cheddar.
Processed cheese is made by pasteurizing, emulsifying, and blending natural cheese. Several varieties of natural cheeses may be mixed, and powdered milk, whey, cream or butter, and water may be added, according to the U.S. Environmental Protection Agency.
The Kraft Heinz cheese plant in Ingleside.