Lamb Weston to shut Washington plant

Under a restructuring plan, Lamb Weston is permanently closing its Connell manufacturing facility in Washington. The company will also temporarily cut certain production lines and schedules across its manufacturing network in North America.

As part of the plan, Lamb Weston plans to reduce its operating expenses, which will involve cutting approximately 4 per cent of its global workforce and the elimination of certain unfilled job positions. The company will reduce its fiscal 2025 capital expenditures by US$100 million, bringing the total to US$750 million from a previous estimate of US$850 million.

The restructuring is expected to generate approximately US$55 million in pre-tax cost savings and improve cash flow in fiscal 2025. However, Lamb Weston anticipates recording total pre-tax charges of US$200-250 million, with about 80 per cent of these charges expected to be cash related. The charges will cover costs associated with unused contracted raw potatoes due to production curtailments, accelerated depreciation of assets, inventory write-downs, employee severance, and other one-time termination benefits.

The company expects to record most of these pre-tax charges in the second quarter of fiscal 2025, with the remainder to follow in the second half of the fiscal year.