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Burdened by Debt, Borden Files for Bankruptcy Reorganization
Once the world’s largest dairy operator, Borden Dairy said it filed for Chapter 11 bankruptcy reorganization, aiming to reduce its debt load “and position the company for long-term success.” The bankruptcy filing over the weekend in Delaware courts followed the November bankruptcy of Dean Foods, one of the largest U.S. milk processors.
Borden, with a workforce of 3,300 people, said it planned to continue normal operations during the restructuring. The company has 13 plants and nearly 100 distribution centers in the Midwest, South, and Southeast. Chief Executive Tony Sarsam said Borden’s sales increased year-over-year in 2019 but “the company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry. These challenges have contributed to making our current level of debt unsustainable.”
U.S. per capita consumption of milk has been on the decline for decades, joined recently by downturns in yogurt and ice cream consumption, although demand for products such as cheese has risen. When it filed for bankruptcy, Dean Foods said the industry also was affected by retailers such as Walmart, Albertson’s, and Kroger opening their own dairy plants to provide “fresh” milk for their stores.
With a history dating from 1857, Borden is named after inventor and entrepreneur Gail Borden, who developed the first commercially successful method of condensing milk, which preserved dairy products and made long-distance shipping possible. The Borden mascot, Elsie the Cow, modeled on a Jersey dairy cow, was introduced in 1936. A company history says Borden was the world’s largest dairy operator in the late 1980s with sales exceeding $7.2 billion. But income faded in the 1990s, and the company went through a series of owners.