TORONTO - Canada Bread Company, Limited today announced it will invest approximately $100 million in its Fresh Bakery operations to construct a new 370,000 square foot bakery facility in southwestern Ontario. The investment reinforces the Company's strategy of establishing competitive large scale facilities that provide a manufacturing platform to support its innovation agenda and drive top line growth.
"This new bakery facility will be the largest in Canada and reflects our commitment to investment and growth as Canada's leading value-added bakery business," said Richard Lan, President and CEO, Canada Bread. "It will drive significantly improved efficiencies in our manufacturing and supply chain, providing the capacity to support organic growth and the growing needs of our customers."
The design of the new facility will integrate modern equipment, best-in-class technologies and sound environmental principles to ensure it operates to the highest standards of operating efficiency, quality assurance and environmental management.
The Company is currently investigating several potential locations for the new facility and a final decision on the location is expected by the end of March 2010. Construction is expected to commence within six months of securing a location with the first production lines being commissioned approximately 12 months later.
The Company will close its three existing bakeries in the Greater Toronto Area which have aging assets that have been further constrained by urban development and cannot support the business' long-term growth. Production will be transitioned over a two-year period as operations at the three plants are wound down, with the first bakery currently expected to close in late-2011, the next in early 2012 and the third in early 2013. Employees will be given opportunities to consider the 300 positions at the new facility or other available jobs elsewhere across the Company's operations.
The total capital investment of approximately $100 million includes land, building and equipment. In addition the Company expects to incur restructuring costs totalling approximately $25 million, which includes $5 million in non-cash items. These costs include asset decommissioning and severances, and will be recorded in the Company's financial statements over the next three years.
Canada Bread Company Limited, which is 89.8% owned by Maple Leaf Foods Inc. (TSX:MFI), is a leading manufacturer and distributor of fresh bakery products, frozen par-baked products and fresh pasta and sauces. The Company had 2008 sales of $1.7 billion and employs approximately 8,500 people at its operations across North America and in the United Kingdom.
For further information: Media Contact: Jeanette Jones, VP Communications, Ph: (416) 926-2020; Investor Contact: Michael Vels, CFO, Ph: (416) 926-2028
Source: Canada Bread Company Limited
