Unilever consolidates, acquires, and restructures.

Unilever, has moved to consolidate its ice cream production in South America. Its Kibon subsidiary will close its only ice cream plant in Argentina and transfer production to Sao Paulo, Brazil as part of a larger restructuring plan. Economic factors in

both countries are behind the move, with Brazilian states put incentives packages on the table in a grab for company investment that began after Brazil's January 1999 currency devaluation. Since then, its competitiveness improved compared with that of Argentina, where the peso is fixed one-to-one against the dollar. Brazil is Latin America's largest economy, with a market is also six times larger than Argentina's, and with the added attraction of lower labor costs. The move continues a migration trend by firms from Argentina to Brazil that has been led by auto parts manufacturers.

The closure of the Kibon ice cream plant was announced just hours before Argentina released unemployment data showing a 15.4% jobless rate, the highest in three years. Unilever's ice cream factory employs 300 workers in the city of Villa Gobernador Galvez in Santa Fe province, some 180 miles northeast of Buenos Aires. The provincial city has 100,000 residents, an unemployment rate of 25% and a poverty level of about 30% according to Rodolfo Cavalieri, secretary of the city government.

Cavalieri told Reuters News Service, "We're very angry with Unilever because they are going to Brazil and by leaving the country they don't support us at all." A Unilever spokesman told Reuters that he was not sure how many people will lose their jobs because of the plant closing. But local newspaper reports have estimated the closure of the factory, will put 300 people out of work. The spokesman said Unilever's other non-ice cream plants in Argentina were safe from closure.

Even as it consolidated in South America, Unilever reported that it had made a new acquisition in Europe, Swirl's, a Dutch soft ice cream franchised ice cream shop chain. Unilever did not disclose financial details of the transaction, which includes 32 outlets that sell soft ice cream, milkshakes, and waffles at railway stations and city centers.

Unilever also acquired Swirl's franchiser, Swirmij BV, and will become the owner of the formula in which consumers choose fresh ingredients to add to their ice-cream. A statement released by Unilever said "We can discern an increasing demand for ice cream products that are freshly made to order. Swirl's allows us to address this need more efficiently. Our product portfolio will broaden."