Maple Leaf Foods Inc. announced plans Monday to build a $660-million poultry processing facility in London, Ontario that is expected to meet a growing appetite for meals that revolve around premium chicken products.
Mississauga-based Maple Leaf is building a 640,000 square foot plant in southern Ontario that CEO Michael McCain said: “to best of our knowledge…will be the single most technically advanced facility in the world.”
The new facility is being built at a time when chicken has become the number one source of protein for Canadian consumers. Maple Leaf is the largest Canadian poultry producer and will use the new plant to serve value-added products, at profit margins significantly greater than what the company earns on traditional fresh chicken. Mr. McCain said the new facility will boost Maple Leaf’s poultry production by more than 30 per cent.
Maple Leaf is currently posting 10-per-cent-plus annual growth in sales of its “Prime” brand poultry, which is raised without antibiotics, and its “Mina” brand of halal chicken, compared to 4 per cent overall industry growth in sales of fresh poultry.
“Our goal is to be the most sustainable protein producer in the world, and our commitment to antibiotic-free poultry and this new facility is consistent with that strategy,” said Mr. McCain in an interview. He said the selection of a site in southern Ontario reflected factors such as transportation of chickens from farms, then into the supply networks of major Canadian retailers.
Maple Leaf expects the opening of the new poultry facility in 2022, along with the closure of three aging plants, will add $105-million annually to the company’s earnings before interest, taxes, depreciation and amortization or EBITDA.
Maple Leaf is putting $605.5-million into the project, while the Ontario government is contributing $34.5-million and the federal government is investing $20-million.
"This is the largest investment in the history of Ontario's agriculture sector, it demonstrates industry confidence in our growing economy," said Ontario Premier Doug Ford in a press release. “This innovative new plant will modernize processing, and help make Ontario's chicken farmers more competitive.”
Maple Leaf is expanding its entire portfolio of prepared meats, recently acquiring Viau Foods for $215-million. The takeover closed in early November, and made Maple Leaf a market leader in Italian cooked meats, sausages, and pizza toppings.
The new London facility will employ 1,450 full time and part-time works, along with 300 construction jobs and a further 1,400 indirect jobs in the supplies and services sectors, according to Maple Leaf.
Maple Leaf will cut 300 jobs over the next four years as it closes facilities in Toronto, Brampton and St. Mary’s, Ontario that are between 50 and 60 years old. Mr. McCain said employees at these plants will have first crack at the jobs in the new facility. Maple Leaf expects to incur one-time costs of approximately $140-million as the company shifts operations.
Andrew Willis