Sector News

Maple Leaf Foods to build $498m poultry processing site in Canada

November 27, 2018
Consumer Packaged Goods

Maple Leaf Foods has announced plans to build a CAD 660 million ($497.7 million) facility in London, Ontario, which it claims will be “one of the most technologically advanced poultry processing plants in the world”.

Meanwhile, production from the company’s three ageing plants in Ontario will eventually be consolidated into the new facility. The company’s site in St. Marys is expected to close by late 2021, while its units in Toronto and Brampton are expected to close by the end of 2022.

Maple Leaf said that each of these plants has infrastructure constraints that limit opportunities to expand and modernise to meet growing market demand.

Construction at the new 650,000-square-foot facility is expected to begin in the spring of 2019, with start-up planned to commence in the second quarter of 2021. It will initially support over 1,450 direct full- and part-time jobs, with additional job growth as production volumes increase over time.

Funding for the project includes a capital investment of approximately CAD 605.5 million ($456.7 million) from Maple Leaf Foods, an investment of CAD 34.5 million ($26 million) from the Government of Ontario and a CAD 20 million ($15.1 million) investment from the Government of Canada under the Strategic Innovation Fund.

“This world-class facility will enable Maple Leaf to meet the steadily growing consumer demand for premium, value-added poultry products, and strengthen Canada’s food system,” said Michael McCain, Maple Leaf CEO.

“It will incorporate leading-edge food safety, environmental and animal care technologies that advance our vision to be the global leader in sustainable protein. This is a historic investment in the Canadian poultry sector, providing significant stakeholder and economic benefits and ensuring that Canada has sufficient domestic processing capacity to meet forecasted poultry production and demand.”

The project is expected to deliver annualised benefits of CAD 105 million ($79.2 million) to the company’s adjusted EBITDA on a run-rate basis within 12 months of completing start-up.

Maple Leaf claimed that chicken is the fastest-growing meat protein in Canada, drawing attention to a “particularly high demand” for halal chicken and products raised without antibiotics.

With regards to the three sites that will close, Maple Leaf said it will work with local communities and authorities to find alternate uses for the facilities.

McCain added: “We deeply regret the impact that these eventual closures will have on our people and communities. While these closures are several years away, we are informing our people well in advance, allowing us to openly communicate and support them through this long-term transition.

“We will provide them with job opportunities at the new facility and other Maple Leaf plants, and services to help them eventually secure new employment.”

Source: FoodBev

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