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Del Monte to remain in Pittsburgh after sale of canned-foods unit, some layoffs expected

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By John D. Oravecz
Thursday, Dec. 19, 2013, 12:01 a.m.
 

Del Monte Foods will remain in Pittsburgh, but some layoffs are likely once it sells its consumer canned-products business to a Philippines company early next year, executives told employees at a meeting on Wednesday.

Del Monte intends to concentrate on pet foods and will change its name after it sells canned products brand names Del Monte, Contadina, College Inn and others to Del Monte Pacific Ltd.

Although its name is similar, the Philippines company is unrelated to the business it is buying and does not have a consumer presence in the United States.

The U.S. company is jettisoning its food business and will change its name when it becomes a standalone pet-focused business in the New Year.

“The majority of our Pittsburgh employees, including several members of the executive leadership team who are based in Pittsburgh, and the business support services they provide, will continue to be an important part of Del Monte Food's business strategy moving forward,” said Del Monte Foods spokeswoman Chrissy Trampedach, in a statement.

Numbers of the employees affected were not discussed for either business at the meeting, and management will begin discussions with individual employees in coming days.

Del Monte Foods has about 330 employees in the Del Monte Center on Pittsburgh's North Shore, many in accounting, finance, information technology and other service jobs shared by both businesses.

The $1.68 billion deal was announced in October and is expected to close by early February.

At the meeting, CEO Dave West and Chief Operations Officer Nils Lommerin shared information on the sale with employees for the first time, held in a “town hall” format, with many in a room and others calling in.

West told employees that the pet food business will still need their support and that Del Monte Foods remains committed to Pittsburgh.

“The pet business represents over half of the revenue and profits of Del Monte Foods and will exist as a standalone business supported by our Pittsburgh location upon the close of the sale of the Consumer Products business to Del Monte Pacific,” Trampedach said.

The new Del Monte Foods will focus on pet food products and snack brands, including Meow Mix, Kibbles 'n Bits, Milk-Bone, 9Lives, Natural Balance, Pup-Peroni, Gravy Train, Nature's Recipe and others. The company also produces and distributes private label pet products and food products.

The canned food business being acquired by Del Monte Pacific will still need support from some Pittsburgh workers for an undetermined time, Lommerin told employees at the meeting. He is expected to become CEO of that business after the sale is completed.

Del Monte Pacific has said the business will remain independent and will be led by a U.S.-based CEO and management team. A spokeswoman could not be reached.

Del Monte Pacific has said the acquisition of the canned fruit, vegetable and broth businesses in the United States will “reunite Del Monte Pacific with U.S. mother brands and opens access to the U.S. packaged food market,” adding sales of $1.8 billion and operating profit of about $180 million.

Del Monte Pacific owns the Del Monte brand in Asia and has leading market shares for canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup.

John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or joravecz@tribweb.com.

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