While last week’s announcement about the sale of Gilroy Foods
and Flavors took many workers by surprise, officials from buyer
Olam International indicated that they plan to hire everyone on
board.
While last week’s announcement about the sale of Gilroy Foods and Flavors took many workers by surprise, officials from buyer Olam International indicated that they plan to hire everyone on board.
Singapore-based Olam International Limited announced that all of Gilroy Foods and Flavors’ current employees will transition to Olam International when the ConAgra sells the company by the end of next month.
“We want them to stay on,” John Gibbons, president of Olam Americas, said last week of the Gilroy Foods and Flavors employees.
Olam deals with several agricultural commodities, including cocoa, garlic and onions. Gilroy Foods and Flavors is a good fit for the company, and Olam officials are enthused about the acquisition, Gibbons said.
“We are excited by this new addition to our rapidly growing portfolio of assets and businesses in the US,” Gibbons said in a prepared statement last week. “It will substantially build on our existing grower franchise in California as well as deepen our strong customer base in the US and globally.”
In a report posted on Olam’s Web site, company officials said the Gilroy Foods & Flavors acquisition enhances Olam’s spices and dehydrates portfolio, expands its customer base, expands its scale in U.S. operations and strengthens the company’s relationship with ConAgra, which it calls a “key customer.”
Union representatives also have good feelings about the sale. Olam seems to be a better fit for Gilroy Foods & Flavors than ConAgra, said Steve Dowd, secretary-treasurer for Teamsters Local 890, which represents Gilroy Foods & Flavors employees.
“We just never seemed to fit the ConAgra business plan,” he said.
Dowd speculated that Olam would be able to open Gilroy Foods & Flavors products to Asian markets, potentially helping the company to thrive.
“Sales in Gilroy have really been in the toilet for more than a year or two now,” Dowd said, although he said some of that could be attributed to the economy.
Rumors about the sale had been swirling since at least January, Dowd said. About a month ago, corporate officials at Gilroy Foods & Flavors’ Modesto plant even approached the union about the matter, asking if they knew any information, he said.
Now, there is speculation about what will happen once Olam acquires Gilroy Foods & Flavors assets, which include facilities in Gilroy, Modesto, Hanford, Nevada, New Mexico and Oregon and has a long-term lease on a warehouse in King City.
One thing is clear – Olam has been on the move in California during the past few years.
In 2007, it acquired Anderson Clayton Corp., a Fresno-based subsidiary of Queensland Cotton. That same year, it purchased China-based Key Foods Ingredients, which has an office in Pasadena. In December 2008, Olam acquired the assets to Firebaugh-based spice company DeFrancesco & Sons, which processes dehydrated vegetables, mostly garlic and onions. In June 2009, it also acquired the Monterey-based SK Foods tomato processing company, which has a processing facility in Lemoore and a processing plant in Williams.
Gilroy Foods is the largest process or onions, garlic and capsicums in North America. Olam officials forecast that it will produce a revenue of $300 to $350 million each year.
The company is Gilroy’s largest employer, with 675 employees as of 2008. A The Gilroy Economic Development Corporation release indicated it had about 800 workers in a January 2009 report.
Company spokesman Jeff Mochal said last week that it was unclear how many employees will remain with SpiceTec Flavors & Seasonings, which will continue to be run by ConAgra, and how many will go to Olam.
Dowd said he has high hopes for the new acquisition. Over the years, Gilroy Foods has provided good-paying jobs for the community with pension plans, he said.
“It’s important for the community keep this business in Gilroy,” Dowd said.
