CHICAGO — Kellanova is closing two plants — one in the United States and one in the United Kingdom — as part of an effort to drive increased productivity and efficiency.
In the United States, Kellanova will close its Eggo frozen food facility in Rossville, Tenn., by the end of 2024 with production shifting to the company’s other facilities across its Americas frozen network. Kellanova currently operates 14 manufacturing facilities in North America.
“The North America frozen supply chain network will be reorganized to drive increased productivity,” Kellanova noted in a Feb. 8 filing with the Securities and Exchange Commission.
Kellanova said the project is expected to result in cumulative pretax charges of approximately $75 million. Cash costs are expected to be approximately $20 million and include employee-related costs and charges related to capital expenses, the company said. Non-cash costs are expected to be approximately $55 million and primarily consist of asset impairment, accelerated depreciation and asset write-offs.
Cost savings will begin to contribute to gross margin improvements in the second half of 2024 and are expected to reach full run rate in 2025, the company noted in the SEC filing.
Kellanova also said it plans to close its European cereal plant in Trafford Park in Manchester, UK, by the end of 2026. The facility employs 360.
Kellanova said the proposed reorganization of its European cereal supply chain network is expected to result in cumulative pretax charges of approximately $120 million. Cash costs are expected to be approximately $80 million across three years while non-cash costs are expected to be about $40 million.