US food company JM Smucker has said it will close a facility in California as part of a strategy to refine its portfolio and improve its cost base.

The company also said it plans to sell its US industrial business and restructure its distribution operations as well as discontinuing operations at its Salinas, California facility.

Over the past two years, JM Smucker said it has continuously acted to improve the margins of its industrial business by exiting low margin contracts in excess of US$50m. Though margins have improved, the company said it has decided to sell its US industrial business in support of its branded strategy. The company has entered into an agreement to sell its industrial bakery ingredients business, located in Orrville, Ohio, to Baldwin Richardson Foods Co.

The company also intends to sell its dairy ingredients business, with manufacturing operations in Oxnard, California and Orrville, Ohio, to Sabroso Company, an Oregon-based privately-owned producer and distributor of fruit products.

In order to reduce costs, JM Smucker plans to discontinue operations and close its Salinas, California facility and redistribute the production to the Orrville, Ohio and Memphis, Tennessee facilities. The company expects to close the plant by the end of calendar year 2005. In addition, as part of an ongoing focus on efficiency, the company will revise its distribution network to better meet the needs of its consumers and customers.