H.J. Heinz Spins-Off Division to Del Monte, Major Investment Planned to Relocate Soup Product Line to existing Del Monte Plant

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Del Monte Foods Company (NYSE: DLM) (San Francisco, California) recently announced plans to relocate its newly acquired soup division from H.J. Heinz Company (NYSE: HNZ) (Pittsburgh, Pennsylvania), to an existing vegetable packing plant located in Mendota, Illinois.

In a complicated deal that spun-off all shares of SKF Foods Incorporated, a subsidiary formed to hold certain Heinz U.S. and Canadian businesses, to a wholly owned subsidiary of Del Monte Foods Company, where each share of SKF Foods received by Heinz shareholders was converted into .4466 of a share of Del Monte common stock.

Del Monte wasted no time getting ready for the transaction and before the deal was even done, had already selected a local construction contracting firm, Phalen Steel Construction Company (Mendota, Illinois), to prepare building spec's for an expansion of the seasonal Mendota facility.

Site work will begin soon on the $25 million, 54,000 square foot building and equipment addition project at Del Monte's plant number 112 located at 347 North 43rd Road in Mendota. Once the new addition becomes operational, the plant will be opened year around creating about 100 permanent jobs.

Once the building is completed sometime during May of this year, Del Monte will begin installing new and existing equipment associated with soup production from the Heinz's plant in Muscatine, Iowa.

Completion of the project is expected sometime during the fall of 2003.

H. J. Heinz Company is one of the world's leading processors and marketers of high-quality ketchup, condiments, sauces, meals, soups, snacks and infant foods through all retail and foodservice channels. The SKF Foods spin-off will allow the company to concentrate on growing its core food condiments products.

With over $3 billion sales, Del Monte Foods Company is one of the country's largest and most well known producers, distributors and marketers of premium consumer grocery products. They operate 17 production facilities and 18 distribution centers in North America and abroad. The spin-off of SKF Foods Inc. gave Del Monte new brand names like College Inn soups, Star-Kist tuna, 9-Lives cat food, Kibbles'n Bits dog food, Pup-Peroni and Pounce pet snacks, and Heinz Nature's Goodness baby food.