The Surrey facility produces a variety of prepared meat products, including ham, sliced meats, sausage and deli products, primarily for retail and foodservice customers in Western Canada. The Company will gradually wind-down operations starting in May 2011 and will close the facility at the end of September. Production will be consolidated at Maple Leaf's prepared meats facilities in Saskatoon, Manitoba and Ontario where there is available capacity, after completing some modest upgrades.
Reduced supply chain costs
"The closure of the Surrey plant is an important step towards consolidating our manufacturing at fewer, dedicated scale plants, resulting in reduced supply chain costs and better efficiencies," said Rick Young, executive vice president, consumer foods. "While necessary, we regret the impact on our skilled and dedicated employees. We will recognise their service and will support their transition to new employment."
The closure will affect approximately 155 employees at the Surrey plant who 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 at other Maple Leaf's facilities, including three other facilities in British Columbia.
The company expects that closure costs, including severance, decommissioning and asset write-downs, will amount to approximately CAN$12.1 million before tax, $4.6 million of which is cash expenses. Of the total closure costs, approximately $4 million will be recorded in the first quarter of 2011 and the remainder when the facility is decommissioned in the fourth quarter of 2011.
• Maple Leaf Foods