Potato processor Lamb Weston is temporarily closing a production line in the Netherlands. This is mentioned in a press release announcing the complete closure of a factory in Argentina. Production will be moved to a new facility.
Details about the temporary closure in the Netherlands, such as the location, have not been disclosed. Lamb Weston opened a brand new factory in Kruiningen in 2024.
Factory closure
In Argentina, Lamb Weston is closing an entire factory in Munro, Buenos Aires, where frozen potato products were produced. In 2024, the American company acquired the remaining shares from former joint venture partner SCP (Sociedad Comercial del Plata).
The factory produced nearly 60.000 tons of frozen fries and potato snacks annually, which were sold under local brands in Argentina, Brazil, Uruguay, and Paraguay. In 2019, Lamb Weston's Argentinian branch entered into a joint venture with local player SCP. Previously, the factory belonged to Farm Frites, which acquired the production site from an Argentinian company in 1996 and also operated it jointly with SCP. It ceased operations in 2014, partly due to high inflation, interest rates, and the unfavorable exchange rate of the peso.
New factory
Farm Frites had advanced plans to build a large new factory in the port city of Mar del Plata, near the capital. This didn't happen because a necessary gas pipeline never materialized. Ultimately, Lamb Weston built a new factory in the city, which opened in October of last year. Production from Munro will move to this location. The factory has a capacity of 90.000 tons of potatoes annually.
"These choices are part of a broader strategy aimed at increasing efficiency and profitability," says Raw Materials Director Sylvia Wilks. "Managing costs throughout our entire supply chain is essential to deliver value to our customers and enable us to invest in other production locations." These choices are part of the 'Focus to Win' strategy previously announced by the listed company.
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Stock price
In mid-December, Lamb Weston presented its financial results for the second quarter of the current fiscal year. Sales volume increased, but at significantly lower prices. Sales volume increased by 8%, primarily in Asia and North America. Shareholders were unhappy with the news and the future outlook, causing the share price to plummet. Prior to the press release, the share price on the New York Stock Exchange plummeted to its lowest level since early 2017, at $40,29 per share.