TORONTO – Canada Bread Bakery, Limited (TSX: CBY) today announced plans to close its frozen bakery facility in Laval, Quebec on March 31, 2011.
The Laval bakery produces a variety of products, including crusty and specialty breads and rolls, and employs approximately 55 people who will be affected when the Company closes the facility on March 31, 2011. Production will be consolidated at the Company's other frozen bakery facilities where there is available capacity. Canada Bread's regional sales office in Laval will continue to be maintained.
"This closure was a difficult decision to make and we will do everything we can to ease the impact on our people," said Réal Ménard, President, Frozen Bakery division with Canada Bread. "However, it will allow us to improve the cost structure and competitiveness of our business, while continuing to deliver the same high standards of products and service to our customers and consumers."
Affected employees will receive severance packages that exceed provincial labour requirements, as well as personal counselling and ongoing outplacement services and workshops. In addition, the Company will give all affected employees first consideration for employment at its fresh bakery facilities in Quebec which employ more than 1,000 people, including 60 jobs that will need to be filled for the upcoming summer production period.
The existing land and building is an excellent asset and the Company recognizes its strategic value longer-term. While the Company has no immediate plans for the bakery, it will keep the facility and consider it for other potential new business and development opportunities in the future.
The Company expects restructuring and other costs related to the closure, including severance, decommissioning and asset write-downs, to be not more than $5.8 million before tax, $2.0 million of which is cash expenses. Of the total closure costs, approximately $5.0 million will be recorded in the fourth quarter of 2010 and the remainder when the facility is decommissioned in the second quarter of 2011.
Canada Bread Company Limited, which is 90% 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 2009 sales of $1.7 billion and employs approximately 8,000 people at its operations across North America and in the United Kingdom.
Source: Canada Bread Company, Limited
