Saturday, August 1, 2015

Brazil owner slices Keystone Foods

McDonald's suppliers leave, not replaced

Brazil owner slices Keystone Foods


Brazilian slaughterhouse and freezer giant Marfrig Alimentos SA bought West Philadelphia butcher's son and amateur sports patron Herb Lotman's Conshohocken-based fast-food supplier Keystone Foods, inventor of McDonald's Chicken McNugget, for $1.26 billion in 2010 from Lotman and investor Lindsay Goldberg LLC.

Keystone has been shrinking ever since. CEO Jerry Dean retired early, in May 2011. Marfrig brought in Campbell Soup Co. veteran Larry McWilliams as COO and Dean's heir-apparent, then sold off Keystone's trucking and warehouse arm to another McDonald's supplier, surprising Keystone veterans.

Then McWilliams left in April 2012, along with HR chief Leslie Billow. Controller/SVP Bill Hennessey left in September. Marfrig didn't replace them, but brought back ex-Keystone VP Bill Andersen, who McWilliams had removed, as Keystone's new COO. CFO John Coggins is currently running Keystone, for now.

What is Marfrig's plan? Company officials had no immediate response when I called and left messages. Ex-Cargill CFO Sergio Rial was named last month to head Marfrig's Seara division, which includes Keystone. The company ran deep into debt to for Keystone and other acquisitions; share values fell; it's currently trying to raise more money on the Brazilian stock market. Local employees are concerned over the future of the West Conshohcoken office and the West Chester lab. Will it be consolidated with Marfrig operations in Alabama?

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

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