Seed Firm Seminis to Cut 600 Jobs, Close 15 Facilities

Seed producer Seminis Inc. on Wednesday said it will eliminate about 600 jobs and 15 production facilities in a global restructuring plan designed to reduce costs by $136 million over the next five years.

Saticoy-based Seminis will take a pretax restructuring charge of $36 million, or 61 cents per share, in fiscal 2000 to cover restructuring costs.

It wasn’t immediately clear which plants will be closed.

The company’s North American operations, which have undergone a similar restructuring in recent months, will not be affected by the latest changes, said company spokesman Humberto Cano.

Seminis has been hurt by the weakened euro, global weather conditions and depressed vegetable markets, Cano said.

Since June 1999, Seminis stock has fallen from a high of $15.31 to a low of $3.09 in May. Shares were unchanged at $4.06 on Nasdaq.

Seminis earned $17.7 million during the second fiscal quarter ending March 31 on sales of $186.6 million, but the company lost $4.4 million during the 1999 fiscal year on revenue of $530.6 million.

Seminis plans to reorganize its 10 legacy seed companies into four regions to streamline operations and sell off non-core businesses.

Mexico-based conglomerate Savia, Seminis’ majority owner, has invested $42 million in Seminis to support its cash needs.

The restructuring will produce a cash-flow benefit of $191 million over the five-year period, including $51 million from asset sales.

“These measures and their cost impact in the short term are critical to unlock the potential growth and profitability of Seminis in the medium and long term,” said Alejandro Rodriguez-Graue, Seminis’ president and chief operating officer.

Earlier this month, Seminis sold the assets of MBS Inc., a U.S. subsidiary that produces soybean seeds, for $11.9 million as part of that strategy. Seminis expects an additional net divestiture of assets in the next three years of approximately $39 million by selling some overseas facilities.

Also, Seminis will write off obsolete inventories, including low-quality seed destroyed this year, totaling $18 million during the fiscal year.

The company also will benefit from new forecasting methodology that will enable it to reduce seed production costs by $35 million, he said.