Kraft Heinz’s streamlining, which has been moving forward aggressively since Berkshire and 3G Capital took the reins in 2015, is continuing with plant closings that were first announced in November 2015.
The Lehigh Valley, Pennsylvania plant will close July 31, with its product lines moving to facilities in Michigan, Illinois and Canada. The plant manufactures A-1 steak sauce, Grey Poupon mustard, and Keurig coffee.
The plant is one of seven plants that will be closed. The others are in Fullerton and San Leandro, California; Federalsburg, Maryland; St. Mary’s, Ontario; Campbell, New York and Madison, Wisconsin.
The Leigh Valley plant is closing despite having received grant money in 2014 from the Department of Community and Economic Development when it was owned by Kraft.
The grant was provided to expand the facility and hire more workers, and Kraft Heinz will repay $200,000 to the State of Pennsylvania for closing the plant.
State vs. State
States across the U.S. have been a fierce battle to retain Kraft Heinz plants, and under an agreement spearheaded by U.S. Senator Charles Schumer and Governor Andrew Cuomo, $20 million in New York state funds were committed to keep open and expand Kraft Heinz’s plants in Walton, Avon and Lowville, New York.
© 2016 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.