US dairy giant Dean Foods has announced plans to close its Oak Farms processing plant in Shreveport, Louisiana later this year – citing the pressures of operating in a “highly competitive marketplace.”
In a statement sent to DairyReporter.com, the Dallas-based dairy processor confirmed reports that production at its Shreveport plant, which primarily processes liquid milk, would be phased-out over the next couple of months.
“Dean Foods informed employees on March 14 that it is ending production at its Oak Farms plant in Shreveport, LA. Production will be phased out over the next two months, and we expect the plant will close in mid-May,” said the statement from Dean Foods.
“Approximately 170 positions will be eliminated, though we will maintain about 25 positions for local distribution and sales.”
“High-level plan for closures” in 2013
Dean Foods has expressed “regret” in its efficiency-driven decision to close its Shreveport facility,
“We regret the impact that this decision will have on our employees and our community. The decision to eliminate jobs in any part of our business is never an easy one,” said the statement. “We operate in a highly competitive marketplace, so we must run our business in the most efficient way possible.”
Earlier this year, in its 2012 financial report, the company vowed to continue its “cost reduction efforts.”
“Our primary focus for the balance of 2013 is on the elimination of costs, particularly fixed costs. With our significantly improved balance sheet, we anticipate expediting our on-going cost reduction efforts, including the closing of 10-15% of our plants to remove fixed costs....,” said the company in the financial report.
DairyReporter.com pressed Dean Foods on its plans for additional plant closures in 2013.
“Though we announced that we have a high-level plan for closures this year, it’s premature to speculate about specific impact. The impact by geography is still being determined,” a spokesperson for Dean Foods said.
Oak Farms production shift
The Oak Farms plant at Shreveport primarily processes liquid milk, although the Oak Farm dairy brand portfolio also includes flavoured milk, ice cream, cottage cheese, sour cream and butter.
Dean Foods added that the majority of production would be shifted from Shreveport to other Oak Farms processing facilities in Dallas and Houston, and another dairy processing plant in New Orleans.
“We will move the current production volume to other regional Dean Foods facilities, and Oak Farms products will continue to be available in Shreveport,” said the statement.