Maple Leaf Foods’ Canada Bread plans to close three Toronto-area bakeries “constrained by urban development” by 2013 and replace them with the biggest bakery in Canada.
The Toronto company said Tuesday it plans to spend about $100 million to build a new 370,000-square foot bakery at an as-yet-undecided site somewhere in southwestern Ontario.
Canada Bread CEO Richard Lan said in a release that the new facility will be the “largest in Canada” and will drive “significantly improved efficiencies in our manufacturing and supply chain.”
The company is scouting several potential locations for the facility and expects to decide on a site by the end of March this year. Construction would be expected to start within the following six months and the bakery’s first production lines would be commissioned about 12 months later, the company said.
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With that in mind, the company also announced plans to shut its three existing bakeries in the Greater Toronto Area (GTA).
All three sites have “aging assets that have been further constrained by urban development and cannot support the business’ long-term growth,” Canada Bread said.
Operations at the three bakeries are expected to wind down over the next two years, with the first bakery to close in late 2011, the second in early 2012 and the last in early 2013, the company said.
Affected Canada Bread employees would have opportunities to consider the 300 positions at the new facility or other available jobs elsewhere across the company’s operations, the company said.
On top of the $100 million bill for land, buildings and equipment for the new facility, Canada Bread said the move will also lead to restructuring costs of about $25 million, including plant decommissioning and severance pay, to be booked into its financial statements over the next three years.
Maple Leaf Foods’ communications vice-president Jeanette Jones said Tuesday that the company hasn’t yet begun discussions with potential host municipalities for Canada Bread’s new bakery, but planned to start later this week.
Canada Bread’s current holdings include 32 bakeries in Canada and the U.S., where it makes fresh breads such as the Dempster’s and Olafson’s brands and frozen and “par-baked” goods such as the Tenderflake brand.
The company, currently 89.8 per cent owned by Maple Leaf, also makes Olivieri pastas and sauces at two North American plants and operates six British and European facilities making frozen baked goods for those markets.
