Canadian baker Canada Bread, in which Maple Leaf Foods has a 90% stake, has announced plans to close two bakeries, affecting around 120 jobs.

The facilities are located in Grand Falls in New Brunswick and Edmonton in Alberta. The closures, the firm said, will "improve efficiencies" in its network by "reducing overheads, allowing rationalisation of lower margin products and consolidating production into more efficient facilities".

The Grand Falls bakery produces cake products, sweet goods and English muffins. It is expected to close in June, affecting around 75 employees. Production of English muffins will be transferred to other facilities and the cake and sweet goods products will be discontinued when the facility closes, the company said.

The Edmonton bakery, which produces raisin and garlic breads as well as foodservice products, will close in March affecting 46 staff. Production will be transitioned to other bakeries.

This is the latest of a number of facility closures at Canada Bread. The company closed its Delta facility in British Columbia in March last year and two months prior announced plans to close its Laval bakery in Quebec.

Show the press release

CANADA BREAD TO CLOSE FRESH BAKERIES IN NEW BRUNSWICK AND ALBERTA

Toronto, ON, Jan. 30, 2013 – Canada Bread Company, Limited (TSX: CBY) today announced plans to close its bakery in Grand Falls, New Brunswick and a bakery in Edmonton, Alberta. The closures will improve efficiencies in the Company’s network by reducing overheads, allowing rationalization of lower margin products and consolidating production into more efficient facilities.

The Grand Falls bakery produces a variety of cake products and sweet goods and English muffins. Approximately 75 employees will be affected when the Company closes the facility on June 28, 2013. Production of English muffins will be transferred to other facilities and the cake and sweet goods products will be discontinued when the facility closes.

The Edmonton bakery, located at 62 Avenue NW, produces raisin and garlic breads and foodservice products. Approximately 46 employees will be affected when the Company closes the facility on March 30, 2013. Production will be transitioned to other bakeries. 

"We must adapt to food inflation and rising costs by further lowering our cost structure and improving operating efficiencies,” said Richard Lan, President and CEO. “We deeply regret the impact this decision has on our people and we will do everything we can to ease their transition to new employment.” 

Closure costs to be incurred in 2013, including severance, decommissioning and asset write-downs, are expected to amount to approximately $6.3 million before tax, $4.3 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 2011 sales of $1.6 billion and employs approximately 6,000 people at its operations across North America and in the United Kingdom.

Original source: Canada Bread