Maple Leaf Foods to cut 1,550 jobs, build new plant
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - Maple Leaf Foods said on Wednesday that it will spend C$560 million ($549 million) over three years to build a new meat-packing plant, while modernizing or closing other plants, resulting in a net loss of 1,550 jobs.
It said most of the job cuts will occur in 2014.
Maple Leaf Chief Executive Michael McCain said the changes will reduce operating costs and boost productivity, helping the company compete with North American rivals at a time when it has faced pressure from a strong Canadian dollar.
The moves are the final step in a C$1.29 billion plan, announced a year ago, to generate double-digit earnings growth in each of the five following years.
"It is to our knowledge the single largest investment in the Canadian food industry in history and it will introduce new and leading-edge manufacturing technologies to this country," McCain told reporters.
Maple Leaf's plans do not come as a surprise, said analyst Robert Gibson of Octagon Capital.
"(This) gives a bit of color as to what plants are going to be closed, but everybody knew ... they were going to have to spend hundreds of millions of dollars over the next two years."
The company's shares on the Toronto Stock Exchange closed 1.5 percent lower at C$10.40 on Wednesday. Continued...