Foster Farms Dairy may close Sacramento plant

dkasler@sacbee.comOctober 15, 2011 

Foster Farms Dairy is considering closing its Sacramento ice cream factory.

The move would further diminish the dairy-processing industry in Sacramento, which lost the headquarters of century-old Crystal Cream & Butter four years ago.

Foster revealed the possible shutdown of the ice cream plant in a filing with state officials.

In the filing, Foster said it is consolidating production with a plant in Salem, Ore., and is laying off 96 workers at the Sacramento plant.

While it called the layoffs a seasonal move, Foster warned that the plant, on 66th Street near Sacramento State, could be closed for good.

"An evaluation is being made as to the long-term viability of the Sacramento facility, and the layoffs may become permanent," the company said in a letter to employees. The letter was included in a filing made with the Employment Development Department.

Foster bought the Sacramento and Salem plants from a bankrupt company called Matterhorn Group Inc. last November. Based in Modesto, the family-owned Foster firm paid $4.5 million for the plants, according to documents filed in U.S. Bankruptcy Court in Sacramento.

John Segale, a spokesman for Foster, said Friday that the Matterhorn acquisition was one of several in recent years that left the company with a lot of capacity.

"There are areas of duplication," he said.

Two years ago, Foster bought another bankrupt dairy processor, Humboldt Creamery.

And in 2007, the company bought the Crystal Cream brand, along with Crystal's distribution operations, from a Massachusetts dairy. Crystal had been sold to the Massachusetts company just five months earlier.

While the Crystal brand has survived, Foster scaled back its Sacramento employment and moved much of the operation to Modesto.

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