TORONTO – Canada Bread Company, Limited today announced it will invest
approximately $100 million in its Fresh Bakery operations to construct a new
370,000 square foot bakery facility in southwestern Ontario. The investment
reinforces the Company’s strategy of establishing competitive large scale
facilities that provide a manufacturing platform to support its innovation
agenda and drive top line growth.
“This new bakery facility will be the largest in Canada and reflects our
commitment to investment and growth as Canada’s leading value-added bakery
business,” said Richard Lan, President and CEO, Canada Bread. “It will drive
significantly improved efficiencies in our manufacturing and supply chain,
providing the capacity to support organic growth and the growing needs of our
customers.”
The design of the new facility will integrate modern equipment, best-in-class
technologies and sound environmental principles to ensure it operates to the
highest standards of operating efficiency, quality assurance and environmental
management.
The Company is currently investigating several potential locations for the new
facility and a final decision on the location is expected by the end of March
2010. Construction is expected to commence within six months of securing a
location with the first production lines being commissioned approximately 12
months later.
The Company will close its three existing bakeries in the Greater Toronto Area
which have aging assets that have been further constrained by urban development
and cannot support the business’ long-term growth. Production will be
transitioned over a two-year period as operations at the three plants are wound
down, with the first bakery currently expected to close in late-2011, the next
in early 2012 and the third in early 2013. Employees will be given opportunities
to consider the 300 positions at the new facility or other available jobs
elsewhere across the Company’s operations.
The total capital investment of approximately $100 million includes land,
building and equipment. In addition the Company expects to incur restructuring
costs totalling approximately $25 million, which includes $5 million in non-cash
items. These costs include asset decommissioning and severances, and will be
recorded in the Company’s financial statements over the next three years.
Canada Bread Company Limited, which is 89.8% owned by Maple Leaf Foods Inc. (TSX:MFI),
is a leading manufacturer and distributor of fresh bakery products, frozen
par-baked products and fresh pasta and sauces. The Company had 2008 sales of
$1.7 billion and employs approximately 8,500 people at its operations across
North America and in the United Kingdom.
For further information: Media Contact: Jeanette Jones, VP Communications, Ph:
(416) 926-2020; Investor Contact: Michael Vels, CFO, Ph: (416) 926-2028
Source:
Canada Bread Company Limited
