Canada Bread to build Canada’s largest bakery

Jan. 12, 2010, TORONTO – Canada Bread Co. today announced it will invest approximately $100 million to construct a new 370,000-square-foot bakery facility in southwestern Ontario.

Jan. 12, 2010, TORONTO – Canada Bread Co. today announced it will
invest approximately $100 million to construct a new
370,000-square-foot bakery facility in southwestern Ontario.

"This new bakery facility will be the largest in Canada and reflects our commitment to investment and growth as Canada's leading value-added bakery business," said president and CEO Richard Lan. "It will drive significantly improved efficiencies in our manufacturing and supply chain, providing the capacity to support organic growth and the growing needs of our customers."

The design of the new facility will integrate modern equipment, best-in-class technologies and sound environmental principles to ensure it operates to the highest standards of operating efficiency, quality assurance and environmental management.

The company is currently investigating several potential locations for the new facility and a final decision on the location is expected by the end of March 2010. Construction is expected to begin within six months of securing a location with the first production lines being commissioned approximately 12 months later.

Canada Bread will close its three existing bakeries in the Greater Toronto Area which have aging assets that have been further constrained by urban development and cannot support long-term growth. Production will be transitioned over a two-year period as operations at the three plants are wound down, with the first bakery currently expected to close in late-2011, the next in early 2012 and the third in early 2013. Employees will be given opportunities to consider the 300 positions at the new facility or other available jobs elsewhere across the company's operations.

The total capital investment of approximately $100 million includes land, building and equipment. In addition the company expects to incur restructuring costs totalling approximately $25 million, which includes $5 million in non-cash items. These costs include asset decommissioning and severances, and will be recorded in the company's financial statements over the next three years.