Bakers Journal

News
Canada Bread to close B.C. fresh bakery facility


March 16, 2011
By Bakers Journal

March 16, 2011, Toronto – Canada Bread Company Limited plans to close a fresh bakery facility located in Delta, B.C. on November 30, in a move intended to increase efficiencies and provide new capacity at another bakery for the company’s fast-growing tortilla category.

The Delta facility produces a variety of fresh bread products, including pantry breads, rolls, buns and tortillas, primarily for retail customers in Western Canada.

Canada Bread will gradually wind-down operations starting in mid-August and will close the Delta bakery at the end of November. Production will be consolidated at the company's other bakeries in Langley, B.C. and Edmonton. During this time, an investment of approximately $11 million will be made to expand the Edmonton bakery to support increased tortilla production.

"These network changes support our focus on both cost reduction and future growth, by increasing our capacity utilization and expanding our production in the high growth tortilla category," said Barry McLean, president of Fresh Bakery. "We regret the impact on our skilled and dedicated employees and we will provide resources and support to ease their transition to new employment."

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The closure will affect approximately 155 employees at the Delta bakery facility who will receive severance packages, counseling and ongoing outplacement services and workshops. They will also be encouraged to seek employment at other Canada Bread facilities.

Closure costs to be incurred in 2011, including severance, decommissioning and asset write-downs, are expected to amount to approximately $4.8 million before tax, $3.1 million of which is cash expenses.