Post Holdings set to close two manufacturing plants in the US
The Cobourg facility in Ontario and the Sparks facility in Nevada employ approximately 300 people.
USA – Post Holdings, a major US food company, has announced plans to shut down two of its cereal manufacturing facilities in North America due to a declining market for ready-to-eat cereals.
In a filing with the US Securities and Exchange Commission (SEC) on April 9, the company stated that the closures of its plants in Ontario and Nevada are part of a strategy to reduce capacity within its cereal production network.
These plants are part of Post Holdings’ Consumer Brands segment, which reported a 2.5% decline in net sales, totaling $963.9 million, in the first quarter of fiscal year 2025. This segment includes North American ready-to-eat cereals, pet food, and peanut butter.
“The ready-to-eat cereal category continues to decline. To respond to this, we are reducing excess manufacturing capacity and optimizing our North American plant network to better utilize our production resources,” said Nicolas Catoggio, president and CEO of Post Consumer Brands.
Production from the affected facilities will be transferred to other Post Holdings locations. The closure process is expected to be completed by the end of December.
The Cobourg facility became part of Post Holdings’ portfolio in 2017 after the company acquired the UK cereal business Weetabix, while the Sparks plant was integrated into the group in 2021 following the acquisition of TreeHouse Foods’ ready-to-eat cereal division.
Post Holdings anticipates incurring pre-tax charges ranging from US$63.5M to US$67.5M in connection with the closures and the transfer of operations.
Additionally, the company expects to spend an extra US$5M to US$7M in capital expenditures to facilitate the transition, which is incremental to its previously announced capital expenditure guidance of US$380M to US$420M for fiscal year 2025.
As a result of these closures, Post Holdings projects annual cost savings of approximately US$21M to US$23M, starting in fiscal year 2026.
In December, Post Holdings signed an agreement to acquire Potato Products of Idaho (PPI), a manufacturer of refrigerated and frozen potato products, along with a manufacturing facility in Rigby, Idaho.
The company has also been reported to be exploring the potential acquisition of Lamb Weston Holdings, a major US supplier of French fries.
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