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Investing.com -- Kraft Heinz (NASDAQ:KHC) has announced a $3 billion investment to upgrade its U.S. factories, marking the company’s largest plant investment in the past decade, according to Reuters. This decision comes amidst a challenging economic climate, as consumer sentiment is reported to be at its second-lowest point in 70 years, and the company has reduced its sales and profit forecasts.
Pedro Navio, Kraft Heinz’s president of North America, stated in an interview that the upgrades are expected to lower costs by increasing efficiency in the plants. This move could help offset the impact of tariffs implemented by the Trump administration, which played a role in the company’s decision to make the investment.
In addition to cost reduction, the investment will enable the company to introduce and market new products more swiftly, according to Navio. Kraft Heinz, the producer of popular products such as Heinz ketchup, Kraft macaroni and cheese, and Philadelphia cream cheese, operates 30 plants across the United States. The company informed Wall Street analysts last month that tariffs were increasing its costs and that consumer purchases were decreasing due to economic uncertainty.
Despite these challenges, Kraft Heinz is proceeding with the investment as a strategy to maintain its market share. Navio emphasized that the investment is not solely about increasing efficiencies or managing tariff issues, but also about enabling Kraft Heinz to produce food for the long term.
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