“We sincerely regret that we cannot proceed with this investment,” Michael McCain, the company’s president and CEO said yesterday.
“It is predicated on factors such as cost and changes in the global pork industry that have significantly impacted the profitability of our fresh meat business and require us to significantly redefine our strategy.”
Previously, the company announced plans to construct a plant to replace its existing facility in Saskatoon. However, the plant’s costs threatened to exceed the company’s financial requirements.
In addition, the Canadian primary pork industry has been impacted by the significant strengthening of the Canadian dollar and challenges in the global pork industry.
Maple Leaf recently completed an analysis of its protein value chain operations in the context of currency and industry challenges to determine its best strategy. As a result, the company will undertake a reorganisation to focus on producing raw material products.
The company, employing over 1,700 people in the province of Saskatchewan, will continue to invest in its operations in the province.
Maple Leaf plans to wind down operations at its existing primary processing plant in Saskatoon within the next three years. Investments will continue at its neighbouring McLeod Street plant.
Worldwide, Maple Leaf Foods employs approximately 24,000 people and has had sales of US $5.4 billion in 2005.