Canada Bread Company, Limited today announced plans to close a fresh bakery facility located in Delta, British Columbia on November 30, 2011, in order to increase efficiencies and provide new capacity at another bakery for its fast-growing tortilla category.
The Delta facility produces a variety of fresh bread products, including pantry breads, rolls, buns and tortillas, primarily for retail customers in Western Canada. The Company will gradually wind-down operations starting in mid-August 2011 and will close the bakery at the end of November. Production will be consolidated at the Company's other bakeries in Langley, British Columbia and Edmonton, Alberta. At the same time, an investment of approximately $11 million will be made to expand the Edmonton bakery to support increased tortilla production.
"These network changes support our focus on both cost reduction and future growth, by increasing our capacity utilization and expanding our production in the high growth tortilla category," said Barry McLean, President, Fresh Bakery. "We regret the impact on our skilled and dedicated employees and we will provide resources and support to ease their transition to new employment."
The closure will affect approximately 155 employees at the Delta bakery facility who will receive severance packages that exceed provincial labour requirements, as well as counselling and ongoing outplacement services and workshops. They will also be encouraged to seek employment at other Company facilities.
Closure costs to be incurred in 2011, including severance, decommissioning and asset write-downs, are expected to amount to approximately $4.8 million before tax, $3.1 million of which is cash expenses.
Canada Bread Company Limited, which is 90% 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 2010 sales of $1.6 billion and employs approximately 7,500 people at its operations across North America and in the United Kingdom.