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Canada Bread CEO on bakery closures: “We must adapt to food inflation and rising costs”

By Kacey Culliney , 01-Feb-2013
Last updated on 01-Feb-2013 at 12:45 GMT

Canada Bread continues its consolidation strategy...
Canada Bread continues its consolidation strategy...

Canada Bread Company will close two fresh bakeries in Canada in a bid to improve efficiency and reduce overheads as it reacts to food inflation and rising costs, its CEO said.

Canada Bread Company will shut two bakeries - its Edmonton, Alberta facility on March 30 and its Grand Falls, New Brunswick site on June 28.

The bakery firm said the move would allow rationalization of lower margin products and enable it to consolidate production into more efficient facilities.

It plans to consolidate much of its production into its large commercial bakery in Ontario opened in September 2011 by parent company Maple Leaf Foods. Maple owns 90% of Canada Bread Company.

The closures form part of a wider consolidation strategy. In May 2012, the bakery firm closed two bakeries in the Greater Toronto area.

“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 of the firm.

“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,” Lan added.

Shut down impacts

The Grand Falls facility produces cake products, sweet goods and English muffins and employs around 75 people.

Canada Bread said the production of cakes and sweet goods will be discontinued but its English muffin production will be transferred to another facility.

The Edmonton bakery produces raisin and garlic breads and foodservice products with around 46 employees.

All production from this facility will be transferred to other bakeries, the company said.

In total the closures are set to cost Canada Bread around $6.3m before tax - $4.3m in cash expenses. The costs will be incurred in 2013, it said, and include severance, decommissioning and asset write-downs.

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