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Wednesday, September 26, 2001
Hygeia Dairy plant is closing
Parent company will lay off 104 workers; office to stay open
By Laura Elder
Caller-Times

David Pellerin/Caller-Times

Suiza Foods announced today that it is closing the local Hygeia Dairy Plant on Nov. 15. Hygeia milk will still be available in local grocery stores, although it will be shipped from San Antonio. More than 100 workers are losing their jobs, Suiza officals said.

Hygeia Dairy Co. will lay off 104 workers in November when it closes its nearly half-century-old milk processing plant in Corpus Christi.
   Hygeia's parent company, Suiza Foods Corp., plans to consolidate its milk production operations, said Stu Gibson,vice president of human resources for Suiza Foods Southwest Region.
   Suiza Foods, which took over the Hygeia operations last year, plans to close the plant Nov. 15. When the milk plant closes, only 49 employees will be left to operate a Corpus Christi branch office. A total of 132 Hygeia branch employees in McAllen, Brownsville and Laredo also will keep their jobs, Suiza officials said.
   Of the 104 employees Hygeia will lay off, 20 are paid salaries, and 84 are paid by the hour.
   Local supermarkets will continue to carry Hygeia products, which will be produced in San Antonio and shipped to 5330 Ayers St., Gibson said. From the Ayers location, where the plant currently operates, Hygeia products will be trucked to local stores.
   Company officials would not elaborate about the reasons for closing the Corpus Christi plant.
   "The basic reason for the closure is the change in the market in South Texas and Rio Grande Valley, primarily in the grocery store industry," Gibson said.
   But Gibson declined to explain what those changes are.
   Gibson said it would be cheaper to manufacture the dairy products elsewhere and deliver them to the South Texas market and the Rio Grande Valley.
   Named for the ancient Greek goddess Hygeia, the company was formed in Harlingen in 1927 when a group of community leaders hired the late Harvey Lee Richards Sr. to open a dairy to provide pasteurized milk door-to-door by wagon twice a day.
   Richards and his brother, John, purchased controlling interest in the new company in 1934. Hygeia built a Harlingen plant in the late 1940s.
   Acquisitions
   Hygeia entered the Corpus Christi market in 1954. Immediately the company began adding to its holding, buying over the years the Corpus Christi companies Karr Milk and Ice Cream Co. as well as Bell Ice Cream Co., King Ranch Dairy in Kingsville and Knolle Jersey Milk Products in 1972.
   Suiza Foods, the nation's largest dairy processor, inherited the Hygeia plant last year in its acquisition of Southern Foods Group. Southern Foods had acquired Hygeia just a year before.
   The company is buying Dean Foods Co. for about $1.5 billion in cash and stock.
   In August, Suiza said its profits rose slightly in the second quarter when it earned $34.6 million, or $1.11 per share the quarter ended June 30, compared with $34.4 million, or $1.06 per share, a year earlier.
   Dean was the No. 1 dairy processor until three years ago when Suiza, which entered the milk business just eight years ago, overtook its rival in a series of acquisitions.
   Suiza processes and distributes products under brand names that include International Delight, Second Nature, Naturally Yours, Mocha Mix and Sun Soy. Dean Foods processes and distributes milk, ice cream and specialty products such as pickles and salad dressings under the Dean's brand and various regional brands.
   Yellow containers
   Hygeia, headquartered here, increased its workforce to 135 from 105 in December of 1999, when Suiza Foods acquired it. It's best known for its yellow milk jugs, introduced in the late 1980s. The company says the yellow containers minimize the loss of nutrients and flavor to ultraviolet rays. In May, it launched an advertising campaign for a new label design.
   In August, Hygeia was among companies honored at the Corpus Christi Regional Economic Development Corp. Compass Awards luncheon. The luncheon was meant to applaud companies that create jobs in the area.
   Antitrust regulators said the merger of Suiza and Dean would hinge on Suiza handing over $165 million and six plants in five states where Dean and Suiza overlap to the Dairy Farmers of America.
   The closing of the Corpus Christi plant had nothing to do with the Dean acquisition, Gibson said.
   Suiza said it will provide severance packages based on length of service. The company will work with the Dislocated Worker Unit of the Texas Workforce Commission to help employees find jobs.
   Some Hygeia employees may have the option of transferring to other processing plants owned by Suiza, Gibson said.


Contact Laura Elder at 886-3678 or elderl@caller.com

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