Robin Hood Multifoods, a wholly owned subsidiary of International Multifoods Corp. (NYSE: IMC), today announced plans to expand its facility in Dunnville, Ontario, and consolidate condiment processing operations there over the next two years.
Starting in early 2001, processing now handled at a plant in Scarborough, Ontario, will be gradually shifted to Dunnville, which will undergo a 65,000-square-foot expansion. The company plans to sell the Scarborough facility, located in a growing metropolitan area.
“We are taking this action for three primary reasons,” said Don Twiner, president of Robin Hood Multifoods. “First, it enables us to move condiment manufacturing closer to our major vegetable growers in southwestern Ontario and to our new cucumber storage facility in Delhi, which will improve product freshness. Second, it will allow us to increase throughput and lower costs, while giving us additional capacity to grow our condiment sales. Finally, the Scarborough site is surrounded by urban development, which is less compatible with large-scale manufacturing operations and provides no room for future expansion.”
Robin Hood Multifoods is a leading Canadian marketer of condiments sold under its Bick’s flagship brand, as well as others, including Habitant, Gattuso and Woodman’s.
When completed in late fiscal 2002, the Dunnville plant will employ more than 160 people full time, as well as more than 400 seasonal workers. Scarborough employees will be eligible and have first priority for positions in Dunnville as that facility expands. The two facilities are about 150 kilometers apart.
“We have excellent people in both facilities,” Twiner said. “We will work with our Scarborough employees to encourage them to consider job opportunities in Dunnville. Our goal is to retain as many Scarborough employees as possible.”
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The investment in the expansion and consolidation project will be about $18 million (CAD), $12 million (USD), which will be partially offset by the proceeds from the sale of the Scarborough property. International Multifoods, parent of Robin Hood Multifoods, expects to recognize unusual charges for exit costs and unusual gains related to the Scarborough sale in several quarters over the next 18 months. The company believes that this will result in a net unusual gain for the project.
“Our decision to make a significant capital investment in our Canadian business underscores our commitment to remaining Canada’s leading processor of quality condiment products and to growing the business,” said Gary E. Costley, International Multifoods chairman, president and chief executive officer. “This initiative has a net present value of Economic Value Added of about $3.5 million. Our investments in the project had previously been incorporated in our long-range business plans, and we remain comfortable with analysts’ current range of estimates for fiscal 2001 and 2002.”
Robin Hood Multifoods, founded in 1909, is one of Canada’s leading food processing and marketing companies, serving the consumer and commercial foods sectors with a broad range of quality products.
International Multifoods is a manufacturer for and distributor to the foodservice industry in North America. The company also is a leading manufacturer and marketer of consumer foods in Canada. International Multifoods had sales of $2.38 billion in fiscal 2000.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company’s operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; market or weather conditions that may affect the costs of grain, cheese, other raw materials and fuel; changes in laws and regulations; the company’s ability to realize the book value of its remaining Venezuelan assets; fluctuations in foreign exchange rates; the company’s ability to realize the earnings benefits from the distribution group’s consolidation and expansion plans; and other factors as may be discussed in the company’s Report on Form 10-K for the year ended Feb. 28, 1999, and other reports filed with the Securities and Exchange Commission.