Ralcorp to consolidate subsidiaries03 August 2012
US private-label food group Ralcorp Holdings is aiming to make a cost saving of $26-31 million in the fiscal 2013 by consolidating its subsidiaries.
Ralcorp, which makes cookies, fresh and frozen bakery products, will merge its snacks, sauces, spreads unit with its cereal and pasta divisions in a bid to improve efficiency and deliver sustainable growth.
IIn a statement, the firm said the restructure will create business which will "possess leading positions across 20 food categories with superior scale and capability in sales, marketing, research and development and operations”.
Ralcorp's snacks business includes Bremner Food Group, which has seven production facilities across the US. Under the new structure, Bremner will be joined with sauces and spreads division Carriage House, cereal unit Ralston Foods and the American Italian pasta Co., which makes own-label and branded products.
Ralcorp also said that it had increased net sales by 11% in the third quarter ending 31 July. However, Kevin Hunt, Ralcorp’s president and chief executive said that the firm continues to be affected by higher commodity costs, lower volumes and changes at its Bloomfield production facility in the US.
“We remain confident in our business strategy and believe that we are well-positioned to compete and seek opportunities to grow despite the challenging environment,” said Hunt.
We believe the actions we are taking, both with respect to Bloomfield and the strategic restructuring, will result in a leaner, more cost efficient operation that is more appropriately structured for sustainable, long-term growth."
The company will reveal its full results next week and provide further details on its restructuring activities.
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