Maple Leaf Foods Inc. announced plans to close its prepared meats facility in Berwick, Nova Scotia, Canada.
The Berwick facility is a 200,000 square foot multi-purpose facility that employs approximately 280 people. Berwick produces bacon, ham, sliced meats, sausage and deli products primarily under the Larsen and private label brands.
The company will gradually wind-down operations starting in February 2011 and will close the facility at the end of April. Production will be consolidated at Maple Leaf's prepared meats facilities in New Brunswick and Ontario where there is available capacity, after completing minor changes. The company will continue to produce products under the Larsen brand and meet its ongoing customer requirements to supply the Atlantic Canada market.
"Our industry is under mounting competitive pressure to become more efficient, and this means we have to make very difficult decisions," said Michael McCain, President and CEO, Maple Leaf Foods. "While this is the business reality, it is hard to make the necessary changes, particularly in a community where we have such an important presence. We are initiating discussions with all levels of government and we will work diligently with all parties to find potential alternate uses for the plant that leverage the skilled workforce and provide ongoing employment opportunities in the region. We are also doing everything possible to ease the impact on our people."
Affected employees will receive severance packages that go beyond provincial labour requirements, as well as personal counselling and ongoing outplacement services and workshops. They will also be encouraged to seek employment across Maple Leaf's facilities.
The company also pledges to work with all levels of government, economic development agencies and community leaders to support initiatives that will help ease the transition and support recovery efforts in the region, including providing access to financial, operations and technical resources. This will include joint efforts to find alternate uses for the facility that would leverage the skill base of the workforce and assist in the process of identifying new economic diversification opportunities for the region.
The company expects that closure costs, including severance, decommissioning and asset write-downs, will amount to approximately $17 million before tax, $9 million of which is cash expenses. Of the total closure costs, approximately $10 million will be recorded in the fourth quarter of 2010 and the remainder when the facility is decommissioned in 2011.
Maple Leaf Foods Inc. is Canadian food processing company headquartered in Toronto, Canada. The Company employs approximately 22,500 people at its operations across Canada and in the United States, Europe and Asia. The Company had sales of $5.2 billion in 2009.