Lamb Weston Holdings announced that it will shut its Munro, Argentina plant and move all Latin‑America production to its new, state‑of‑the‑art facility in Mar del Plata. The closure will affect roughly 100 employees, who will receive severance packages in line with Argentine labor regulations.
The decision is a core element of the company’s “Focus to Win” strategy, which targets $250 million in annualized cost savings by fiscal 2028. The Mar del Plata plant, which began shipping in early Q2 of fiscal 2026, offers lower operating costs, higher automation, and a more efficient supply‑chain footprint than the older Munro site. By consolidating operations, Lamb Weston expects to eliminate duplicate maintenance, reduce logistics complexity, and better align capacity with demand across the region.
In its Q2 FY2026 earnings release, Lamb Weston reported earnings per share of $0.69 versus consensus of $0.64—a $0.05 or 7.8 % beat—while revenue rose to $1.62 billion from $1.59 billion, a $30 million or 1.9 % increase. The company cited strict cost controls and the early ramp‑up of the Mar del Plata facility as key drivers of the earnings beat, even as it faced a $50‑$60 million pre‑tax charge for the plant shutdown. Management reiterated that the “Focus to Win” program will deliver $200 million in annualized run‑rate savings by fiscal 2027 and $120 million in working‑capital improvements by year‑end 2027.
Sylvia Wilks, Chief Supply Chain Officer, said the consolidation “is part of our broader strategy to improve profitability and enhance operational efficiency across our global manufacturing network. Effectively managing costs across our supply chain is critical to delivering value to customers while enabling us to prioritize investments that modernize physical assets.” President and CEO Mike Smith added that the company remains on track to achieve the $250 million savings target and that the plant closure is a “strategic investment in a higher‑yielding facility that will support long‑term growth.”
Investors have expressed concern about the company’s international segment, where EBITDA declined and price‑mix headwinds are expected to pressure margins. Despite the Q2 earnings beat, analysts noted that the focus on cost discipline and the consolidation of Latin‑America operations signals a shift toward a more resilient, high‑margin business model. The move is expected to strengthen Lamb Weston’s competitive position in the frozen‑potato market, where soft global restaurant traffic and inflationary cost pressures continue to weigh on profitability.
The plant shutdown will be completed in the coming weeks, with the company monitoring the transition to ensure minimal disruption to supply chains and customer commitments. Long‑term benefits include a leaner manufacturing footprint, lower operating costs, and a stronger capacity to respond to regional demand shifts, while the company remains vigilant about potential risks such as supply‑chain disruptions and the need to maintain high product quality during the consolidation.
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