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Campbell Soup Co said on Thursday it plans to close its Sacramento soup, sauce and beverage plant to cut costs as demand for its canned soups in the United States has declined.
The plant, built in 1947, is Campbell’s oldest and employs about 700 people full time.
Campbell also said that it plans to close a spice plant in South Plainfield, New Jersey, which employs 27 people.
Campbell, which employs about 19,900 around the world, has seen soup sales struggle over the past several winters from heavy discounting in the food industry and Campbell’s lack of strong new products. The Sacramento plant has Campbell’s highest production costs per case, the company said.
Campbell shares fell 1 cent to $34.85 Thursday morning on the New York Stock Exchange.
Campbell expects the closings to cost about $115 million on a pretax basis, most of which will be incurred in the current fiscal year. Once fully implemented, it expects the moves to result in annual pre-tax savings of $30 million, beginning in fiscal 2016, with fiscal 2014 savings of about $21 million.