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."

Unilever also announced in August that it was realigning its top management structure into two operating units, one for food and the other for home and personal-care products. The Anglo-Dutch company said the move would speed decision-making and tighten control of its world-wide marketing strategies, and accelerate product innovation for its wide range of brands, from Knorr soup and Magnum ice cream bars to Timotei shampoo, Calvin Klein fragrances and Persil laundry detergent.

The changes come amid growing pressure for Unilever, whose growth rate lags behind that of its main rivals, to become a faster and more flexible organization. A spokesman said the changes aim to streamline the consumer-goods giant's complex management structure, which currently has overlapping areas of responsibility between product categories and geographic regions.

Each unit will have a chief executive responsible for global operations. But Unilever will retain much of its complex structure, with two chairmen and dual headquarters in London and Rotterdam. The company also said the management changes aren't a prelude to splitting Unilever into two separate concerns, as some analysts and investors are urging. "These are top-level management changes, and not a precursor to a split," said a Unilever spokesman. Niall FitzGerald, one of Unilever's co-chairmen, hasn't ruled out a split but has said he first wants to focus on integrating recent acquisitions, including Bestfoods of the U.S., which will make Unilever's food unit the world's second-largest, after Switzerland's Nestle SA.

Under the new structure, home and personal-care products will be led by Keki Dadiseth, 54 years old, a member of the executive committee who prepared a report that led to the management shakeup. Patrick Cescau, 52, currently financial director, will be in charge of the food division.

Unilever also announced a 14% slump in pretax profit for the second quarter, to 928 million euros ($841.3 million) from 1.1 billion euros a year earlier. Sales rose 3%, to 10.9 billion euros from 10.6 billion euros. Unilever said earnings were hit by restructuring costs as the company carried out plans to close factories, trim staff and winnow its product portfolio to a core group of 400 brands from more than 1,600. stripping out such exceptional costs, operating profit grew 10% to 1.24 billion euros. Sales of leading brands rose 6% in the quarter, Unilever said. However, excluding the contributions of its recent major acquisitions - Ben & Jerry's and SlimFast - sales of the leading brands were up just 3.2%.

Speaking of Ben & Jerry's, the Vermont-based superpremium marketer is now officially a subsidiary of Unilever. At a meeting in New York on Aug. 3, the majority owners of outstanding shares of Ben & Jerry's approved the merger with the Unilever, giving it control of 91% of Ben & Jerry's shares. The company, whose shares had traded on the Nasdaq Composite stock exchange, had its symbol delisted on the 3rd. Investors holding Ben & Jerry's class A common stock will be contacted to turn in their shares for Unilever' s buyout price of $43.60. There is no deadline to tender shares.

Unilever has also made news this month with its sale on August 9th of $7.35 billion of notes, the third largest corporate bond sale of the year, to help fund its purchase of Bestfoods, maker of Hellmann's mayonnaise, Knorr soups, and Skippy peanut butter among other top food brands. Unilever's bond sale is the first volley in what company treasurer Jan Haars said will be a round of financing that will include a $10 billion sale of longer maturity bonds in the fourth quarter. Haars said Unilever will finance the rest of its $20.3 billion price tag for Bestfoods in the commercial paper market.