TORONTO – Maple Leaf Foods (TSX: MFI) announced that it will consolidate its further processed poultry operations into its Brantford and Mississauga Ontario facilities where there is available capacity and opportunities for future growth.
"We have an immediate opportunity to increase efficiency and capacity utilization in our value-added poultry business, which this consolidation will achieve," said Michael H. McCain, President and CEO, Maple Leaf Foods. "Value-added chicken is an important market for us and we plan to grow the business by focusing our operations and investments in our Mississauga and Brantford plants."
This includes fully cooked, partially cooked or marinated frozen chicken products prepared for Retail and Food Service customers. The category excludes refrigerated prepared chicken products such as deli meat and meal solutions. The Company will transfer production from its 42,000 square foot facility in Ayr, Ontario and close the plant in May 2012. Investments totalling approximately $6.5 million will be made in Mississauga and Brantford to support the production transfers. In addition, the Company will incur approximately $5.6 million before taxes in restructuring costs, of which approximately $4.2 million are cash costs.
The investment in the Mississauga facility will create approximately 75 new hourly and salaried positions at that facility. The closure of the Ayr plant will result in a net reduction of approximately 100 positions. In addition to working notice, affected employees will receive severance packages, as well as outplacement and counselling assistance, and will be encouraged to apply for other positions across Maple Leaf Foods. Maple Leaf will also work with all levels of government and community leaders to seek to find alternate, non-competing uses for the facility that would leverage the skill base of the workforce and reduce the impact of the closure.
"We deeply regret the impact on our people. We will treat them fairly and support them through this transition to secure new employment, either within Maple Leaf or in the broader economy," said Mr. McCain.
Maple Leaf Foods Inc. ("Maple Leaf" or the "Company") is a leading Canadian value-added meat, meals and bakery company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the Company employs approximately 21,000 people at its operations across Canada and in the United States, Europe and Asia.
Forward-Looking Statements
This release contains, and remarks made by representatives of the Company in connection with this release, may contain forward-looking statements.
Such statements include, but are not limited to, statements with respect to the Company's strategies, plans, actions and expectations including expectations about future investments, costs efficiency and capacity utilization and other expected benefits of the announced plans. Words such as "expect," "anticipate," "intend," "attempt," "may," "will," "plan," "believe," "seek," "estimate," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict.
These statements are based on and were developed using a number of factors and assumptions including, but not limited to: stability in the Canadian economy, stability in prevailing exchange rates among the Canadian dollar and the U.S. dollar, stability in the availability and pricing of raw materials, energy and supplies; the ability to implement price increases successfully; stability in the competitive environment; no future product recalls; the continued ability of the Company to access cost effective capital when needed; and no unexpected or unforeseen events occurring that would materially alter the Company's current plans. All of these assumptions have been derived from information currently available to the Company including information obtained by the Company from third-party sources. These assumptions may prove to be incorrect in whole or in part. In addition, actual results may differ materially from those expressed, implied or forecasted in such forward-looking statements, which reflect the Company's expectations only as of the date hereof.
Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by the forward-looking statements include risks associated with implementing and executing projects and plans to transfer production between plants; risks posed by food contamination, pandemics and product recalls; risks associated with the price of commodities and the inability of the Company to control commodity prices; risks associated with exchange rate fluctuations; risks associated with changing consumer tastes, preferences and buying patterns; and risks posed by competition. Additional factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by the forward-looking statements are discussed more fully in the Company's filings made with the Canadian securities regulators including in the section entitled "Risk Factors" in the Company's Management's Discussion and Analysis for the year ended December 31, 2010. All of such filings are available on SEDAR at www.sedar.com.
Some of the forward-looking statements may be considered to be financial outlooks for purposes of applicable securities legislation including, but not limited to, statements concerning future costs and capital expenditures. These financial outlooks are presented in order to provide readers with information regarding the expected scope of the planned changes. These financial outlooks may not be appropriate for other purposes and readers should not assume they will be achieved.
The Company does not intend to, and the Company disclaims any obligation to, update any forward-looking statements (including any financial outlooks), whether written or oral, or whether as a result of new information, future events or otherwise, except as required by law.
Source: Maple Leaf Foods Inc.
