Hillshire Brands to end sandwich and sausage operations in Alabama

US food company Hillshire Brands has announced that it will cease breakfast sandwich and sausage operations at its Alabama facility by 30 December.

The company plans to shut its manufacturing site in Florence, a move which will affect approximately 1,100 staff.

The decision follows a comprehensive review, which identified that the facility will not allow the company meet its efficiency or long-term profitability expectations.

Production at the site will be moved to other locations within the company’s manufacturing network, Hillshire noted.

Hillshire Brands expects to incur costs associated with the closure of around $34.4m, including $10.4m cash severance charges, $21m non-cash accelerated depreciation charges, and other cash closure costs of around $3m.

In addition, the company expects to recognise around $0.9m in cash severance charges in its third quarter of 2014, along with around $8.2m in non-cash accelerated depreciation costs by the end of the second quarter of 2015.

Commenting on the proposed closure, Hillshire Brands chief supply chain officer Tom Hayes said that closing the Florence facility was a very difficult decision to make.

"For many years, these employees dedicated themselves to running a quality operation, which they have done exceptionally well. Unfortunately, after looking at our business, we determined that this facility will not allow us to meet our efficiency or long-term profitability expectations," Hayes added.

The staff affected by the closure will be offered severance and outplacement support, the company said.

Hillshire plans to collaborate with state and local employment and training agencies to help workers transition during the closure.

Formerly known as Sara Lee, Hillshire Brands engages in the production of meat-centric food products and foodservice operations.

The company offers consumer brands such as Jimmy Dean, Hillshire Farm, Ball Park, Aidells, Gallo Salame and State Fair.

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Image: Hillshire Brands plans to move production at the Florence site to its other locations. Photo courtesy of KEKO64 at FreeDigitalPhotos.net.