Maple Leaf Foods restructure costing 1550 jobs
Food processor looks to streamline its distribution processes.
October 19, 2011
by Canadian Packaging Staff
In a somewhat surprising move, Maple Leaf Foods, headquartered in Toronto, has announced it is slashing 1,550 jobs while shutting processing plants in Toronto, Hamilton and Kitchener in Ontario, North Battleford, Sask., Moncton, NB and Winnipeg, MB, in an effort to better organize and streamline its distribution processes. These plants are expected to close by the end of 2014.
The manufacturer of processed meats and other foods says these changes are part of an on-going three-year, $560-million restructuring plan that it hopes will raise its brands’ competitiveness and profitability.
While the restructuring plan will create an additional 1,150 new jobs, the plant closures actually mean a net loss of 1,550 jobs from a workforce of 21,000 employees.
The company says it will construct a new prepared meats plant in Hamilton, while investing in plants Winnipeg, Saskatoon and Brampton, Ont.
Also affected will be closures of four distribution centers in: Moncton, Burlington, Ont., Kitchener, and Coquitlam, B.C. It will consolidate distribution for Eastern Canada in a new facility in Ontario and using an existing facility in Saskatoon as its Western Canadian hub.
Maple Leaf has been streamlining for much of the past two years in a bid to improve its profitability and become more efficient but the October 19, 2011 announcement is the biggest move so far by the maker of Maple Leaf and Schneiders meats and seller of Tenderflake lard and Dempster’s and other breads.
The company was focused three years ago on a Lysteria-tainted meat scandal that led to a massive recall of cured meats manufactured at a contaminated Toronto plant. Later, Maple Leaf was under pressure from shareholders to improve its finances and restructure.
“The final phase of this plan will establish Maple Leaf Foods as a more streamlined and profitable company, well positioned to deliver significant and sustainable value to its shareholders,” says Michael McCain, president and chief executive officer with Maple Leaf.
“We are creating, through one of the largest single investments in the Canadian food industry, a highly efficient, world-class prepared meats production and distribution network that will markedly increase our competitiveness and close the cost gap with our U.S. peers.”