Kraft closing Henderson marshmallow plant in June

Friday, March 9, 2001 | 11:18 a.m.

Kraft Foods Inc.'s Henderson marshmallow factory will close in June, putting 49 local employees out of work.

A spokeswoman for the company today said equipment in the 135,000-square-foot building would be dismantled, shipped to one of Kraft's midwestern plants and the local facility would be sold.

Cathy Pernu, a spokeswoman for Northfield, Ill.-based Kraft, said a comprehensive separation benefits package, which includes severance pay, extension of medical and dental benefits and job-search assistance, would be offered employees losing their jobs.

"This was a difficult decision because we have a great team of employees at the plant," said Michael Mastroianni, senior director of manufacturing services for Kraft. "However, there is excess capacity in our manufacturing network and it is most cost-effective to consolidate production of marshmallows into our Midwest plant, which can accommodate the entire product line."

He said less than 60 percent of the Henderson plant's capacity was used. Pernu said the number of marshmallows the plant manufacturers per day is proprietary information and could not be disclosed.

Pernu said the Midwest plant, in Kendallville, Ind., employs 300 to 500 people, depending on the season, and manufactures caramels and other confections as well as marshmallows.

The Henderson plant, located in an industrial park at 1180 Marshmallow Lane, was built in the late 1980s by the Kidd Co., a private-label confections manufacturer, and sold to Favorite Brands International in 1996.

The Kidd family offered tours of the factory until it was sold to Favorite Brands, which ended the tours. Until then, an estimated 500,000 visitors a year watched factory workers make the gooey treats.

In 1999, Nabisco Foods acquired Favorite Brands. When Philip Morris Cos. Inc. -- parent company of Kraft Foods -- acquired Nabisco Foods last year, marshmallow manufacturing was turned over to Kraft, the nation's largest branded food company.

Mike De Lew, a senior vice president at real estate brokerage Colliers International, Las Vegas, said the production facility has some unique characteristics -- "clean rooms," industrial power and rail access -- that would make it attractive for another food manufacturer to acquire.

De Lew said it was more likely that a developer or investor would buy the building, which he estimates has a value of about $5 million, and would lease it to a company for around $44,000 a month.