BATTLE CREEK, MICH. โ WK Kellogg Co is stepping back from a decision made in 2021 that would have seen the ready-to-eat cereal maker shift production from Battle Creek to a cereal plant in Canada by the end of 2023. Instead, the company now plans to retain cereal plant volume at Battle Creek while investing in technology, according to the Michigan Economic Development Corp. (MEDC).
WK Kellogg Co (then known as Kellogg Co.) originally planned to idle two of the three cereal production lines in Battle Creek and move production to its facility in Belleville, Ont., citing the โsignificantly lower cost to manufacture cereal in Bellevilleโ as well as the plantโs โsuperior operating efficiency.โ Now, the company intends to retain 170 jobs at the Battle Creek plant, training the employees in high performing work systems and making them more competitive in the WK Kellogg Co manufacturing network, the MEDC said.
As part of the decision, WK Kellogg said it will invest $44 million and create 43 jobs. The Michigan Business Development Program will support the project with a $5 million performance-based grant while the Michigan Strategic Fund has approved a 15-year MSF Designated Renaissance Zone in support of the project.
โWe are pleased to maintain cereal production in Battle Creek, the Michigan community where it all began more than a century ago and where it begins again with WK Kellogg Co,โ said Gary Pilnick, chairman and chief executive officer of WK Kellogg Co. โWe are proud to be doing so in partnership with our employees and their union, along with the support of Battle Creek Unlimited, the city of Battle Creek and the state of Michigan.โ
In an Aug. 9 investor day that took place in New York, executives at WK Kellogg Co said the company planned to invest between $450 million and $500 million over the next three years to align and improve its supply chain. According to documents filed Dec. 12 with the MEDC, WK Kellogg Co invested $67 million in the Belleville plant over the past two years in preparation for the shift in production. The filing said the Belleville facility is nearly ready to accept new volume and the change in direction will result in $20 million in lost savings for WK Kellogg Co in its first year as well as additional lost savings in subsequent years. WK Kellogg Co told the MEDC it is working with its union to identify short- and long-term cost savings within the Battle Creek facility.
In addition to Battle Creek and Belleville, WK Kellogg operates breakfast cereal plants in Wyoming, Mich.; Omaha, Neb.; Lancaster, Pa.; and Memphis, Tenn.
