Food manufacturer HJ Heinz has unveiled worldwide cost cutting measures to boost faltering financial performance and strengthen its defence against interventionist shareholders clamoring for more aggressive action.

The Pittsburgh-headquartered maker of the iconic tomato ketchup, says its revamp will cut costs by $355 million (€277m; £190m) over the next two years through closing fifteen factories and shedding 2,700 jobs.

The plan also includes a $145m reduction on promotional spending in Europe [WAMN: 29-May-06], where the company has experienced its greatest difficulties. It also plans to launch around one hundred new products next year.

These moves, however, are unlikely to satisfy billionaire investor Nelson Peltz and his Trian Management Fund who have been pressuring Heinz to return more money to shareholders, divest more assets and cut selling and other costs by $575m annually.

They also want five nominees to join Heinz's board of directors - a proposal roundly rejected by beans barony chairman/president/ceo William Johnson.

He insists: "The company is at a key inflection point and we cannot afford to let the board and management be diverted from our progress and plan by creating a dysfunctional and destabilising environment. We have a world class board that represents all the shareholders, including Mr Peltz and his fund investors."

The company also reported a 19% drop in fiscal fourth-quarter profit. Net income fell from $206.5m, to $167.9m. Sales rose 7.6%.

Data sourced from Financial Times online; additional content by WARC staff