000619 Farmland Unit FDL Foods to Shut Iowa PlantJune 11, 2000Dubuque, IA - Farmland Industries Inc., the largest U.S. farmer-owned cooperative, said its subsidiary FDL Foods will shut its sausage processing factory in Dubuque, Iowa, following the sale of the plant to Smithfield Foods Inc. Farmland executive vice-president Bill Fielding said the move was part of an overall plan to strengthen the company's pork operations. Smithfield Foods, based in Smithfield, Va., exercised an option to buy the Dubuque plant, Farmland said. A spokesman for Smithfield said the company's subsidiary John Morrell & Co. would invest $10 million to upgrade the facility for use in the production of processed meats. Smithfield is the world's largest hog producer and fresh pork processor, according to Hoover's Company Profiles. Friday will be the last day of work for most of the plant's 1,200 employees, Farmland said, adding that about 140 workers would be retained until operations are wound down within 30 days. Farmland said nearly 100 administrative employees will receive the company's corporate severance programme while about 1,100 production workers could choose between a severance package and a transfer signing bonus. Employees who wished to transfer to other Farmland plants will receive a bonus payment, while those who choose not to will get a severance package that includes lump sum payments. The depressed agricultural economy has hit Farmland hard. On April 17, Farmland said it lost $22.1 million in the second quarter ended in February, compared with a profit of $2.1 million a year earlier. First-half losses totalled $48.6 million. Most of the loss was tied to depressed fertiliser prices.
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