Maple Leaf transformation nears completion
Dec. 22, 2014
by Erica Shaffer
MISSISSAUGA, Ontario – Maple Leaf Foods' is nearing the end of its initiative to streamline its operations.
"Maple Leaf Foods is in the final stage of completing a complex strategy to step-change profitability in our business," said Michael McCain, president and CEO. "While there is always some element of uncertainty of timing given the unpredictable nature of start-ups, we are clear on the benefits and see a much brighter picture for 2015. We have dramatically increased scale and technology, consolidated production into fewer, highly efficient plants and streamlined our product mix. We will complete the transition early next year and have a clear path to realizing our financial targets."
The company's Lagimodiere plant in Winnipeg, Manitoba, and the Walker Drive facility in Brampton, Ontario, both are fully commissioned with only minor upgrades remaining.
Maple Leaf's McLeod plant in Saskatoon, Saskatchewan, is in the final stages of transition. Performance at the plant continues to improve. Meanwhile, consolidation of the eastern network is completed and achieving performance targets.
Strategic capital spending is complete, with the exception of performance guarantee holdbacks and cash flow timing, the company reported. Total capital spending remains largely in-line with 2010 estimates, Maple Leaf said.
Wiener production at the new Hamilton, Ontario, facility is nearly fully commissioned with minor adjustments. Maple Leaf expects the plant to be completed by the end of the first quarter of 2015. Commissioning of the final sliced meats and deli operations is well underway and -- based on current operating performance trend lines – is expected to achieve full production by the end of the first quarter.
Finally, the processing plant on Winnipeg will close Dec. 31. It is the sixth of eight plant closures. Production has significantly ramped down at the two remaining legacy plants in Kitchener, Ontario, and Toronto. Maple Leaf said the plants are expected to close by the end of the first quarter of 2015. In the meantime, some capacity will be maintained to ensure the company meets its commercial requirements.
Since 2010, the company has focused on its prepared meats business and distribution network. Starting with its primary pork processing facilities, the company closed five plants and expanded three others. Additionally, Maple Leaf consolidated 17 distribution centers into two and built a 400,000-sq.-ft. processing plant. Ultimately, the company simplified its product portfolio and moved to one integrated operating platform.