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May 20, 2020

McCain suspends US capex plans due to Covid-19 impact

Canadian frozen potato products giant McCain Foods has issued an update on its plans to expand a US plant.

By Leonie Barrie

Canadian frozen potato products giant McCain Foods has suspended plans to expand a US plant because of a drop-off in demand from the foodservice channel during the coronavirus crisis.

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The French fries heavyweight announced a year ago it planned to spend around US$300m expanding its processing plant in Othello, Washington but has put plans on the back burner as most foodservice outlets have been closed in an attempt to halt the spread of the virus.

In a statement sent to just-food, Dale McCarthy, VP for integrated supply chain at McCain’s operations in North America, said: “We have made the decision to pause the Othello expansion project, announced last year.  

“As you are aware, governments have requested that all non-essential work be stopped while we are in this critical phase of the Covid-19 pandemic. 

“Also social distancing measures are impacting out of home consumption, and subsequently foodservice customer demand for our products. Once social distancing measures are lifted and the out of home market recovers, we will review restarting the expansion.” 

The expansion was to add another 170,000 sq ft to the existing plant and include a battered and conventional French fry processing line. The project was expected to create an additional 80 jobs.

Related Companies

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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