Production will be consolidated at Maple Leaf's prepared-meats facilities in New Brunswick and Ontario that have available capacity. The company said it will continue to make products under the Larsen brand and meet its ongoing customer requirements to supply the Atlantic Canada market.
"Our industry is under mounting competitive pressure to become more efficient, and this means we have to make very difficult decisions," said Michael McCain, president and CEO. "While this is the business reality, it is hard to make the necessary changes, particularly in a community where we have such an important presence. We are initiating discussions with all levels of government and we will work diligently with all parties to find potential alternate uses for the plant that leverage the skilled workforce and provide ongoing employment opportunities in the region. We are also doing everything possible to ease the impact on our people."
McCain said affected employees will receive severance packages that go beyond provincial labor requirements, as well as personal counseling and ongoing outplacement services and workshops. They will also be encouraged to seek employment at other Maple Leaf's facilities.
Maple Leaf will also work with government, economic development agencies and community leaders to support initiatives to help ease the transition and support recovery efforts in the region, including providing access to financial, operations and technical resources. This will include joint efforts to find alternate uses for the facility that would leverage the skill base of the workforce and assist in the process of identifying new economic diversification opportunities for the region.
Closure costs, including severance, decommissioning and asset write-downs, are expected to amount to approximately $17 million before tax, $9 million of which is cash expenses. Of the total closure costs, approximately $10 million will be recorded in the fourth quarter of 2010 and the remainder when the facility is decommissioned in 2011.