DJ UPDATE: Folgers New Orleans Coffee Plant Shut; Sara Lee Closed

Tue. September 02, 2008; Posted: 01:55 PM

By Susan Buchanan and Holly Henschen

Of DOW JONES NEWSWIRES

Procter & Gamble Co. (PG) is assessing the date to reopen its giant Folgers coffee-roasting plant in New Orleans after hurricane Gustav entered south Louisiana on Monday morning and left wide swathes of the city without power.

Sara Lee will take a look at its currently closed, roasting and other coffee facilities outside of New Orleans later this week.

"We completely shut down all operations (in New Orleans) at 7 p.m. on Saturday," said P&G Folgers spokeswoman Jen Becker. "We began preparations for shutdown as early as Tuesday" of last week.

The New Orleans population was nearly 95% evacuated to other locations by late Sunday as the storm approached, according to city officials.

"We are still assessing the sites and do not yet have a firm date and time to re-open," Becker said. "Our main priority right now is contacting all Folgers employees and confirming their safety." In addition to its New Orleans roasting plant, Folgers has coffee warehousing and distribution facilities in the city.

J.M. Smucker Co. (SJM) this summer agreed to acquire the Folgers coffee business. An agreement was approved by the boards of both companies and P&G is expected to split-off Folgers and finalize the transaction early this fall.

Employees are scheduled to reenter Sara Lee's roasting and other coffee properties outside of New Orleans Friday, after the plant didn't reopen Tuesday following the Labor Day weekend, said Alissa Bolton, company spokeswoman. Sara Lee will then be able to assess damages, which are thought to be minimal, she said.

-By Susan Buchanan and Holly Henschen, Dow Jones Newswires; 504-371-5461 susan.buchanan@dowjones.com

(END) Dow Jones Newswires

09-02-08 1355ET

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