Manufacturing News

Consolidations leading to plant closures, study shows

March 22, 2003
/ Print / Reprints /
ShareMore
/ Text Size+
Since improved efficiency is a prime driver of mergers and acquisitions, it's not surprising that the consolidation of the U.S. food industry is resulting in the closure of less efficient food plants.

Some 141 plants in the U.S. and Canada closed their doors this year alone, and more than 85 major mergers and acquisitions were made, with more in the works or pending by year end, according to Industrial Information Resources, Inc (IIR).

Data compiled by the Houston-based IIR also indicate that companies seeking to construct new facilities are facing more stringent state and local regulations concerning air emissions and water pollution. Given the increasing capital investment, food processors are more likely to expand when possible rather than construct new plants, according to IIR.

IIR's capital spending and MRO projections for 2001 are at $13.8 billion. In the top 45 publicly held companies, spending projections are estimated at $11 billion, up 1.1 percent over 2000 projections. More than two-thirds of capital spending is occurring within existing facilities, with money being spent mainly on production, packaging and process control equipment. Improvements in automation and information integration are expected to be the major trend impacting capital spending over the next five years.

Excess production capacity is becoming a problem in some parts of the food industry, notably grain processing and meat production, according to IIR. The primary reason is a decline in foreign demand, partly due to increasing production by processors in South America and Asia, particularly China.

One more bit of information from IIR: Five of the biggest industry players now control about 50 percent of sales in the U.S.

Did you enjoy this article? Click here to subscribe to Food Engineering Magazine.

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

Plant of the Year 2014

Blue Diamond Growers was chosen as Food Engineering's 2014 Plant of the Year. The Sacramento-based company is the world’s largest producer of almonds and almond ingredients.

Podcasts

Burns & McDonnell project manager RJ Hope and senior project engineer Justin Hamilton discuss the distinctions between Food Safety and Food Defense as well as the implications for food manufacturers of the Food Safety Modernization Act.
More Podcasts

FSMA Audit

What is the is most important step you have taken to become ready for a FSMA audit?
View Results Poll Archive

Food Engineering

FE September 2014

2014 September

The September 2014 issue of Food Engineering explores how lean manufacturing, quality improvements and increased automation helps processors meet rapidly changing demands. Also, read how robotics, advanced machine controls, software and OEE are just a few of the tools that can boost productivity on packaging lines.

Table Of Contents Subscribe

THE FOOD ENGINEERING STORE

Food-Authentication-Flyer-(.gif
Food Authentication Using Bioorganic Molecules

This text provides critical tools and data needed to augment routine food analysis and enhance food safety by aiding in the detection of counterfeit, and potentially deleterious, foods.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Food Master

Food Master Cover 2014Food Master 2014 is now available!

Where the buying process begins in the food and beverage manufacturing market. 

Visit www.foodmaster.com to learn more.

STAY CONNECTED

FE recent tweets

facebook_40.pngtwitter_40px.pngyoutube_40px.png linkedin_40px.pngGoogle +