ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, September 6, 1996 TAG: 9609060027
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
DATELINE: CAMDEN, N.J.
SOURCE: Associated Press
AIMING AT THE GLOBAL MARKET, Campbell Soup Co. has announced a restructuring plan that has its investors cheering. Campbell Soup Co. plans to lay off hundreds of workers, close plants around the country and sell some of its less-than-profitable businesses in its latest move to boost sales and earnings.
Campbell also said Thursday it would buy back up to $2.5 billion worth of its own stock - a step intended to make remaining shares more valuable. Details about the offer will be announced next week.
The developments were cheered by investors. New York Stock Exchange-listed Campbell jumped 6.5 percent Thursday, rising $4.371/2 a share to close at $71.871/2.
``They're obviously doing the right thing for shareholders,'' said Lawrence Adelman, an analyst with Dean Witter Reynolds in New York.
The sixth-largest U.S. food products company said it wants the restructuring to make it a top performer among the world's consumer companies.
In a move to accelerate the company's growth in Germany and Europe, Campbell said it would buy a German soup maker, Erasco Group, from Grand Metropolitan PLC for about $210 million. Campbell said Germany is the biggest soup market outside the United States.
``We are poised for breaking away from our competitors in the food industry,'' said David Johnson, Campbell chairman, president and chief executive. ``Now, more than ever, our vision is within reach.''
Johnson was brought into Campbell in 1990 to turn around the beleaguered company by streamlining operations and focusing on its core businesses.
Campbell said the restructuring would reduce earnings by about $160 million after taxes in the first quarter of fiscal 1997. The announcement came a day after Campbell reported a 26 percent increase in earnings for the fourth quarter of its 1996 fiscal year, or $180 million, 73 cents per share, on sales of $1.64 billion. For the fiscal year, Campbell reported profit of $802 million, or $3.22 per share, on sales of $7.68 billion.
Campbell ended speculation about pending layoffs, announcing it would cut 650 jobs in North America, including 175 positions at its world headquarters in Camden. The company has about 44,000 employees.
The company also said it would close a ramen noodle plant in Atlanta, a poultry research facility in Farmington, Ark., and a seasonal tomato paste processing plant in Sacramento, Calif. A Pepperidge Farm biscuit operation in Lakeland, Fla., will be reconfigured.
Campbell also said it will sell poultry processing facilities in Douglas, Ga., Tecumseh, Neb., and Worthington, Minn. About 1,100 jobs will be affected, but spokesman Kevin Lowery said employees at the poultry facilities likely will be offered jobs by prospective buyers.
The restructuring follows a review of every aspect of operations. The goal was to find extra cash to pump back into the company.
Campbell did not specify which businesses would be sold to free up funds, but said the lines represented sales of about $500 million - about 7 percent of its annual revenue.
In recent years, Campbell has acquired businesses with more than $1.2 billion in sales, including Pace Foods, maker of Mexican sauces, and Arnotts, Australia's leading cooking company. Earlier this year, it sold its Mrs. Paul's frozen seafood business.
Once considered a laggard in the industry, Campbell, under Johnson, has laid off 11,000 workers and closed or sold businesses generating $800 million in sales. The antiquated plant where Campbell began producing condensed soup in 1897 was even closed and later demolished. Johnson still wants to do more, saying Campbell is trying to win ``Best in Show.''
LENGTH: Medium: 76 lines ILLUSTRATION: PHOTO: AP. Campbell Soup world headquarters in Camden, N.J.,by CNBannounced a set of strategic, brand-building and organizational
actions geared toward boosting sales and earnings. color. KEYWORDS: JOBCHEK