The Omaha facility will shut by the end of 2026, while production will be scaled back at its Memphis plant starting from late 2025.
The American cereal giant WK Kellogg has announced its intention to close its plant in Omaha, Nebraska, and reduce production at its Memphis facility in Tennessee.
The company stated that these plans align with a supply chain modernisation strategy revealed at an investor day event last August.
The Omaha facility is scheduled to shut down by the end of 2026, while production at the Memphis factory will be scaled back beginning in late 2025.
This reorganisation will result in a reduction of the company’s workforce by over 17%, impacting approximately 550 employees.
Simultaneously, the manufacturer of Raisin Bran, Special K, and Frosted Flakes is planning to increase production at its plants in Battle Creek, Michigan; Belleville, Ontario; and Lancaster, Pennsylvania, with a planned investment of approximately $450 million to $500 million.
In a statement accompanying the release of its Q2 results yesterday (6 August), CEO Gary Pilnick said: “Today’s announcement regarding modernising our supply chain marks a significant step forward in executing our strategy and enhancing WK Kellogg Co.’s long-term strength and resilience.
“These actions will help transform our supply chain and will allow us to enhance our production across a more reliable, agile, and cost-effective manufacturing network, supporting top-line delivery and driving margin expansion.”
WK Kellogg, which was spun off from the packaged food giant Kellogg last October as its North American cereal business, reported sales of $672 million for the second quarter, down 3.9% year-on-year. Net income increased from $27 million to $31 million, although adjusted EBITDA fell from $89 million to $78 million.
The company has forecasted that its adjusted net sales for 2024 will be at the lower end of its previous forecast range of 1% growth to a 1% decline.
In February, Kellanova, the other company formed from Kellogg’s spin-off of operations last year, outlined plans to close two factories in North America and Europe as part of efforts to enhance efficiency and boost productivity.