Canada Bread to shut down bakery facility in Quebec

Canada Bread has announced plans to shut down its bakery in Shawinigan, Quebec, Canada, on 3 May, a move which will lead to the loss of up to 74 jobs.

The company has cited the significant decline in consumer demand for snack cakes for its decision.

The closure will strengthen efficiencies in the company’s network by reducing overhead and supporting a focus on higher margin products and new market opportunities, the company said.

The Shawinigan bakery manufactures a variety of snack cakes under the Chevalier, Cadbury and Obsession brands.

Canada Bread president and CEO Richard Lan said that the company is conducting a strategic review to identify category expansion opportunities.

“Based on the outcome of this work, there could be potential in the future to utilise this plant to support other manufacturing requirements. “

“However, based on declining capacity utilisation we have no alternative but to close the facility,” Lan added.

Canada Bread noted that it will support its employees in their transition to new employment.

Closure costs to be incurred in 2013, including severance, decommissioning and asset write-downs, are expected to reach C$3.1m ($3.03m) before tax, C$1.6m ($1.56m) of which represents cash expenses.

This is the second closure announcement by the company this year – in February 2013, the company announced plans to shut down two bakery facilities in Grand Falls, New Brunswick and Edmonton, Alberta, as part of its strategy to reduce costs, affecting about 121 jobs.

Canada Bread, which is 90% owned by Maple Leaf Foods, is a manufacturer and marketer of bakery products, frozen par-baked products and fresh pasta and sauces under the Dempster’s, Olafson’s, POM, Ben’s and Olivieri brands.

It posted C$1.6bn ($1.56bn) in sales in 2011 and has 6,000 employees across its operations in North America and the UK.

Maple Leaf Foods, based Toronto, Canada, is involved in the bakery, meals and meat segments with operations across Canada, the US, Europe and Asia.