Maple Leaf Foods cuts 400 salaried positions

Canadian meat and poultry processor Maple Leaf Foods is cutting more than 400 salaried positions, with the majority of those jobs to be eliminated before the end of 2015.
According to a Toronto Star report, the decision to eliminate those jobs is the just latest round of cuts for the company that has spent the larger part of the past seven years cutting its workforce, merging facilities and selling off other divisions in a $1-billion attempt to return to profitability.
The company recently completed a transformation where it built a series of new plants to replace old and outdated plants, with the last old plant going offline in April. During the transformation process, Maple Leaf Foods consistently reported financial losses. However, for the third quarter of fiscal year 2015, Maple Leaf Foods saw its net earnings from continuing operations rise to CA$18.7 million (US$1.43 million), rebounding well after experiencing a loss of CA$26.7 million during the third quarter of fiscal year 2014. The Canadian company also reported for the quarter an adjusted earnings per share of CA$0.16, compared to a loss of CA$0.12 during the same quarter of fiscal year 2014.
Maple Leaf Foods employs approximately 12,000 people across Canada.

Maple Leaf Foods returns to profitability

Maple Leaf Foods saw its net earnings from continuing operations rise to CA$18.7 million (US$1.43 million) during the third quarter of fiscal year 2015, rebounding well after experiencing a loss of CA$26.7 million during the third quarter of fiscal year 2014.
The Canadian meat, poultry and food company also reported for the quarter an adjusted earnings per share of CA$0.16, compared to a loss of CA$0.12 during the same quarter of fiscal year 2014.
Maple Leaf Foods is enjoying a return to profitability after nine consecutive quarters of losses as it replaced outdated processing facilities with modern, more efficient ones. Maple Leaf Foods’ last outdated processing plant went offline on April 30.
“We are making meaningful progress on eliminating inefficiencies driven by the ramp-up of our new facilities, though not at the pace we had hoped for,” said Michael McCain, president and CEO of Maple Leaf Foods. “Delivering on our strategic margin goal of consistent double digits will be achieved through reaching stable end-state production in our network, which we expect will extend into 2016. Along with efficiency gains, we are launching a number of exciting initiatives, including a strong platform for more sustainable meat production, to deliver ongoing profitable growth.
The company had shown a move toward profitability during its second quarter of fiscal year 2015, ending with a net loss of CA$7.5 million, a year-over-year improvement of CA$32 million.

Maple Leaf Foods hosts "Eat. Think. Vote." discussion

The Maple Leaf Foods Sustainability Action Committee hosted a spirited Eat. Think. Vote. panel discussion at the company’s ThinkFOOD! Centre. The topic focused on the urgent need to address food insecurity in Canada.
“Food insecurity is a problem of national and global proportions and interlocking policy areas,” said Michael H. McCain, President and CEO, Maple Leaf Foods. “It cannot be solved in policy silos or by companies acting in isolation. It requires public support and coordinated action. It cannot be solved with industry in pitched battle with the environmental movement or other stakeholders. It requires a national Food Strategy for Canada.”
The panel included Diana Bronson, Executive Director of Food Secure Canada; Dr. Evan Fraser, Canada Research Chair in Global Food Security at the University of Guelph; Ron Bonnett, President of the Canadian Federation of Agriculture; Dr. Carolyn Bennett, Liberal candidate for Toronto-St. Paul’s; and Michelle Bilek, NDP candidate for Mississauga-Erin Mills. The three major political parties were invited to present their views at the event.
Eat. Think. Vote. events are being held across the country, encouraging discussion regarding critical food security and sustainability issues leading up to the federal election.
“We are calling for a bold new national food policy based on the goals of zero hunger, healthy and safe food and a more sustainable food system,” said Bronson. “It will take more than the marketplace to create a healthy and sustainable food system and we need to do more than individually ‘vote with our forks’ when buying groceries – we need to engage with politicians who want us to vote for them.”
“Developing the ways and means to sustainably, equitably and ethically feed the world population will be one of the defining challenges for the next 50 years,” said Dr. Fraser. “The solution is so much more than simply producing more food. We need to ensure marginalized people have the economic means to demand good food; our food production needs to be better for biodiversity; and we need to establish better safety nets to protect at-risk societies against food crises.”
A webcast of the Eat. Think. Vote. discussion is available, here.
Food Secure Canada is an alliance of organizations and individuals working together to advance food security and food sovereignty.
Dr. Fraser is an associate of the University of Guelph Food Institute and a Fellow of the Pierre Elliot Trudeau Foundation. He is the founder of the Feeding 9 Billion Challenge at the University of Guelph, which brings like-minded students together from diverse academic backgrounds to drive change for better food security globally.
Maple Leaf Foods’ Sustainability Action Committee is an employee-led team focused on engaging Maple Leaf employees on the importance of sustainable food production in Canada and globally.

Maple Leaf Foods losses narrow during Q2 2015

Canadian meat and poultry company Maple Leaf Foods narrowed its losses again in the second quarter of fiscal year 2015, ending with a net loss of CA$7.5 million (US$5.76 million), an improvement from the CA$39.5 million loss recorded during the second quarter of fiscal year 2014.
The company, which has posted a net loss in each of the last nine quarters as the company has been undergoing a transformation by replacing outdated processing plants with new ones that operate more efficiently. Maple Leaf Foods’s last old plant went offline on April 30, allowing the company to now move forward.
Other highlights of Maple Leaf Foods’ second quarter include:


• Adjusted operating earnings increased by CA$33.8 million when compared to the previous year
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin increased to 6 percent from the second quarter of 2014 and 4.7 percent from the first quarter of 2015
• Adjusted earnings per share of $.013, up from a loss of $0.12 during the second quarter of FY 2014
“We are very pleased with the progress we made in the second quarter,” said Michael H. McCain, president and CEO of Maple Leaf Foods. “We delivered improved volumes with strong commercial performance. We marked a major milestone with the closing of the last of our remaining legacy facilities, which brought an end to our duplicative supply chain, and continued to improve the operational efficiency of our new start-up plants. All of these factors contributed to a significant improvement in earnings, consecutive quarter-over-quarter growth in EBITDA margin, and positive free cash flow. Over the balance of the year, we have aggressive plans to build on our commercial momentum and a clear line of sight on how to capture the additional benefits from our new plants and deliver our 10 percent EBITDA margin target.”

Maple Leaf Foods net loss narrows to CA$2.8 million

Canadian meat and poultry company Maple Leaf Foods reported a net loss of CA$2.8 million (US$2.31 million) for the first quarter of fiscal year 2015. The loss was narrowed substantially, however, when compared to the net loss of CA$124.6 million when compared to the first quarter of fiscal year 2014.
The company has faced a net loss in each of the past eight quarters as the company has been undergoing a transformation by replacing outdated processing plants with newer, more efficient ones. With the last of those old plants shutting down on April 30, Maple Leaf Foods CEO Michael H. McCain sees brighter times ahead.
“We had a very strong quarter, returning to profitability in adjusted earnings per share (EPS),” said McCain, referring to a CA$0.05 adjusted EPS, compared to a adjusted EPS loss of CA$0.25 during the previous quarter.
“We recorded a $40 million improvement in our adjusted operating earnings year over year, restored our margins and made excellent progress in recovering our prepared meats volume from last year’s unprecedented environment. We were able to reduce our operating costs as we come to the final stage of our network transition, and today, with the last production run at our last legacy plant, we are bringing an end to our duplicative supply chain. Our final phase is to bring our new state-of-the-art facilities to full operational effectiveness. All of this keeps us on track to reach our strategic financial target.”

Maple Leaf Foods posts seventh straight quarterly loss

Canadian meat and poultry processor Maple Leaf Foods reported its seventh consecutive quarterly loss on February 26, although the loss was not as dramatic as it had been during previous quarters.
The fourth-quarter net loss from continuing operations narrowed to CA$23 million (US$18.45 million), from CA$47.9 million (US$39.6 million) a year ago. The adjusted loss was CA$13.7 million (US$11 million) versus CA$56 million (US$45.1 million) a year earlier.
The losses have come as a result of a transformation of plants for the company, as it has been closing outdated plants and rebuilding more modern ones. Maple Leaf, one of Canada's biggest processors, is nearing the end of the multiyear rebuilding program as it seeks to boost profits and better compete with U.S. rivals. In the short term, the CA$710 million (US$571.9 million) plan hinders Maple Leaf with duplicate overhead costs and start-up expenses.
With much of the network transition process completed, Maple Leaf Foods President and CEO Michael H. McCain expects further financial improvement in coming quarters.
"2014 was a pivotal year for Maple Leaf Foods. Our seven year journey of investment and development, headlined by the rebuilding of our supply network, is nearing its end," said McCain. "We have completed what we set out to accomplish in 2007 and finished the year with new momentum. We will be closing our largest legacy plant in Kitchener [Ontario] this week, leaving only one remaining facility in Toronto to close. Our margins have been structurally reset over the year, and while volume continued to be weak in the fourth quarter, we expect it to recover in 2015 as the fundamental environment continues to improve. We are confident that we will deliver our strategic targets in 2015."

Maple Leaf Foods network transition nearing completion

Maple Leaf Foods is reporting solid progress with its network transition, a strategy that began with the company's primary pork processing operations, and since 2010 has focused on its prepared meats plants and distribution network.
In the past four years, the company has closed five plants, expanded three others, consolidated 17 distribution centers into two and built a 400,000 square foot state-of the-art processing facility. To enable this transition, the company simultaneously simplified its product portfolio to realize scale efficiencies and moved from multiple operating systems to one integrated platform.
The company is nearing completion of this structural shift in its supply chain, with current status as follows:


• The expanded Lagimodiere plant in Winnipeg, Manitoba, is fully commissioned with only minor optimization remaining.
• The McLeod plant in Saskatoon, Saskatchewan, is in the final stages of transition and while not yet operating to expectations, performance is improving and variances are not material to achieving the company's overall strategic targets.
• The consolidation of the eastern distribution network is complete and achieving its targets.
• The expanded Walker Drive facility in Brampton, Ontario, is fully commissioned with only minor optimization remaining.
• Strategic capital spending is complete (with the exception of performance guarantee holdbacks and cash flow timing) and total capital spending over this period of investment is largely in-line with 2010 estimates.
• Wiener production at the new facility in Hamilton, Ontario, is nearly fully commissioned with minor adjustments expected to be completed by the end of the first quarter of 2015. Commissioning of the final sliced meats and deli operations is well underway, and based on current operating performance trend lines, is expected to achieve full production by the end of the first quarter.
• The processing plant on Panet Road in Winnipeg will close December 31, the sixth of eight plant closures. At the two remaining legacy facilities in Kitchener, Ontario, and Toronto, production has significantly ramped down. While some capacity will be maintained to ensure the company meets its commercial requirements, these plants are expected to close by the end of the first quarter of 2015.
"Maple Leaf Foods is in the final stage of completing a complex strategy to step-change profitability in our business," said Michael H. McCain, President and CEO, Maple Leaf Foods. "While there is always some element of uncertainty of timing given the unpredictable nature of start-ups, we are clear on the benefits and see a much brighter picture for 2015. We have dramatically increased scale and technology, consolidated production into fewer, highly efficient plants and streamlined our product mix. We will complete the transition early next year and have a clear path to realizing our financial targets."

Maple Leaf Foods net losses continue in third quarter

• 

  A. Stefik

  Meat and poultry processor Maple Leaf Foods experienced a net loss for the third quarter of fiscal year 2014.

  From WATTAgNet:
  Canada-based meat and poultry processor Maple Leaf Foods experienced a CA$26.77 million (US$23.88 million) net loss for continuing operations during the third quarter of fiscal year 2014, compared to a loss of CA$24.5 million (US$20.1 million) during the same quarter of 2013.
  The company has consistently been operating at a loss as it has been replacing outdated processing facilities and replacing them with more modernized ones. Maple Leaf Foods during the third quarter ended production at its plant in Mocton, New Brunswick, and has three remaining plants to close to complete this transformation.
  Despite the losses, Maple Leaf Foods did benefit during the third quarter its Meat Products Group benefited from improved pork processing margins and price increases.
  "We continue to make important advances towards our strategic goals," Michael H. McCain, president and CEO of Maple Leaf Foods, said on October 30. "We have benefited from improved margins during a period of unprecedented volatility and high costs in the raw materials market. We are managing the related impact on demand and see the volume decline as short term. While the ongoing cost of duplicate supply chains and start-ups continues to be material, we are achieving milestones every quarter. Product transfers into the new Heritage facility in Hamilton, [Ontario] continue, facilitating one more plant closure in the quarter. Once fully commissioned, our Heritage plant will be one of the most advanced, efficient facilities of its type in North America."

Maple Leaf Foods asks if people, technology aid food safety more

Maple Leaf Foods hosted its sixth annual Food Safety Symposium recently in Mississauga, Ontario. At the event, 170 representatives from more than 100 companies and organizations gathered at Maple Leaf's invitation to discuss the most pressing concerns in food safety. The 2014 edition of event was themed "People or Technology", asking participants to debate which was the best investment to make a steep change in food safety globally.
"Food safety incorporates a broad cross-section of people and technologies and so we adopted a deliberatively provocative theme this year," said Dr. Randy Huffman, senior vice president of operations and chief food safety officer at Maple Leaf. "Everyone would choose "both" to the question of investing in people versus technology, but in reality, resources are never unlimited and choices about investments, both large and small, are made each and every day. The provocative question we debated was which investment would lead to the greatest advancement?"
Those advocating investments in people spoke about food safety behaviors being the ultimate determinant of whether or not a food process will produce a safe product. The tens of thousands of people working at each step of the journey from farm to fork need to be on side to make a step change in global food safety. Those who said technology would move us further, faster, highlighted the timely, data driven decisions new investments foster. Technology saves lives and brings people together in a virtual environment so that sharing and learning can occur.
"The point of this annual event is to help advance the cause of food safety," Huffman said. "This resolution had people focused on the best way to achieve that, making it a successful day for all involved."
The symposium participants had the opportunity to learn more of the "Safe Food Canada - The Learning Partnership" a proposed model for standardizing food safety competencies and enabling people working in the Canadian food industry to progress and grow in the profession with the overall goal of improvement of Canadian food safety performance. A session was also dedicated to the role technology is playing in food manufacturing.
Maple Leaf Foods has adopted a food safety promise to provide consumers safe, great tasting food produced in a safe work environment. An enabling principle in fulfilling this promise is the notion that Maple Leaf treats food safety as a non-competitive issue and actively shares food safety learnings and promotes sharing of information among industry and government groups through events such as this annual symposium.

Maple Leaf Foods transfers production from New Brunswick plant

Canadian meat and poultry processor Maple Leaf Foods has completed the transfer of production from its facility in Moncton, New Brunswick, to other facilities in the company's scale prepared meats network. The previously announced closure occurred on schedule at the end of September and decommissioning of the facility will be complete by the end of October.
"We are in the final months of a historic transformation of our prepared meats network that will step-change our competitiveness and profitability," said Michael H. McCain, president and CEO, Maple Leaf Foods. "This year, we have been acutely focused on shifting production to new scale facilities and closing legacy plants. We are committed to doing this in a way that is respectful and fair to our people, working closely with communities to support their transition to other employment."
Maple Leaf Foods has operated the 48-year-old Moncton plant since 2000. Products that were previously made at the plant have been transitioned to the company's scale, higher-efficiency facilities in Winnipeg, Manitoba; Saskatoon, Saskatchewan, and Hamilton, Ontario.
Maple Leaf Foods, in partnership with the UFCW local 1288P union and local and provincial governments, established an adjustment committee in 2012 to support the transition of the approximately 450 affected employees to new employment. Approximately 100 people worked at the facility at the time of closure. The committee has established a learning center to provide employees with new skills training, job search and career development assistance.

Maple Leaf Foods commits to improved animal wellness

Maple Leaf Foods has demonstrated a commitment toward the health of its animals with the creation of an animal wellness leader position. Dr. Stephanie Cottee will join the company in this capacity to establish an integrated and comprehensive animal wellness program that crosses the company’s pork and poultry operations and interface with its suppliers and other stakeholders.
The animal wellness program will encompass all areas that affect health, including nutrition, medication, housing, transportation and processing. Cottee will work closely with the company’s management, operations and animal care experts to assure the program is operating well.
"As Canada's largest meat company, we have a duty to continually advance the humane and ethical treatment of animals within our care," said Lynda Kuhn, senior vice president of sustainability and public affairs, Maple Leaf Foods. “This requires staying close to emerging science, processes and technologies that advance both our knowledge and capacity, and that of our industry partners, to raise, transport and process animals in a manner that optimizes good health and protects their welfare. Dr. Cottee's deep experience across the scientific, academic and applied areas of animal wellness will be vital in implementing a strong program that distinguishes Maple Leaf in this vital area of corporate responsibility."
Cottee brings significant academic and applied experience in animal behavior, research and welfare. Most recently, she held the position of provincial programs advisor - Ontario Pork, where she managed the Canadian Quality Assurance and Animal Care Assessment program. In this capacity, she acted as the primary liaison between key pork industry stakeholders to develop, implement and improve swine production programs and animal welfare practices in Ontario. She was also instrumental in implementing a nation-wide swine traceability program. Prior to her role with Ontario Pork, Cottee worked for the Chicken Farmers of Ontario, where she supported a range of projects including on-farm biosecurity, health and safety, and traceability. She has also worked as a research writer to support the development of two codes of practice for the National Farm Animal Care Council.
Cottee has a PhD in farm animal behavior and welfare and a master of science in farm animal behavior and welfare from the
University of Guelph
. She was a sessional professor for the university's animal behavior and welfare program. Stephanie completed her honors bachelor of science zoology degree at the University of Toronto.

Maple Leaf Foods issues notice of repayment

Canadian meat processor Maple Leaf Foods Inc. has issued notice of repayment to be made on April 14 for all of its outstanding senior notes in aggregate principal amounts of CAD706 million (USD631.8 million), including USD318 million notes converted at 1.106 USD/CAD, and original maturity dates ranging from December 2014 to January 2021. The estimated redemption amount based on current foreign exchange rates, U.S. Treasury yields and Government of Canada bond yields, including make-whole premiums and accrued interest, is $800 million.
The repayment will be paid from available and committed bank credit facilities and will provide greater financial flexibility. Following repayment of the notes, the meat processing company's remaining debt will consist largely of short term bank facilities that the company plans to repay with proceeds from the previously announced $1.65 billion sale of its interest in Canada Bread Company Ltd. to Grupo Bimbo, S.A.B. de C.V.
The Canadian Competition Bureau has recently given clearance for the transaction to proceed. Subject to remaining regulatory and shareholder approvals, the sale is expected to close in the second quarter of 2014.

Maple Leaf Foods pins 4Q $21.7 million loss on costs of building new plants

Canadian meat, poultry and food processor Maple Leaf Foods reported a net loss of $21.7 million for the fourth quarter of fiscal year 2013, and a yearly loss of $12.3 million. Those losses were a sharp contrast to the Maple Leaf Foods earnings of $70 million in the fourth quarter of 2012 and $172 million for fiscal year 2012.
The company on February 27 reported its financial results for the two periods ending December 31, 2013.
A major contributing factor to the Maple Leaf Foods losses was that the company is opening new, more efficient plants in its prepared meats segment while still running the old ones.
"We are in a peak phase of executing our prepared meats network strategy, which added tremendous costs and inefficiency in the quarter as we ramped up five new facilities while continuing to operate our parallel older plants. As expected, this is causing short-term earnings volatility, which was compounded by weak protein markets," said Michael H. McCain, president and CEO of Maple Leaf Foods.
"For three years we have been building a new plant network, which entered a peak period in December of 2013 as we began commissioning Maple Leaf's single largest facility in Hamilton (Ontario)," continued McCain. "Now the focus changes. From here on, our job is to get the new plants running at peak performance, transfer production from older high cost plants to new low cost plants, and close the older plants down. Once completed, later this year, we expect to start seeing significant structural margin expansion. We also expect more normal market conditions to unfold in 2014. Combined with our plans to pay down debt, invest in the business and return excess capital to shareholders, we believe Maple Leaf will be very well positioned to drive profitable growth and deliver strong shareholder value."
The Maple Leaf Foods Meat Products Group, which includes value-added fresh pork, poultry and turkey products sold to retail, foodservice, industrial and convenience channels, as well as value-added prepared meats, lunch kits, protein snacks, experienced a fourth-quarter loss of $42.6 million, compared to an earnings, also of $42.6 million in the fourth quarter of 2012. The Meats Products Group posted an $86.2 million loss in fiscal year 2013, compared to earnings of $98.4 million for fiscal year 2012.
Helping Maple Leaf Foods offset its 2013 losses from new plant construction was the sale of the Maple Leaf Foods rendering business Rothsay, and pasta business Olivieri.

Maple Leaf Foods’ third-quarter, year-to-date earnings drop substantially

Maple Leaf Foods reported a hefty drop in its third-quarter and year-to-date operating earnings, with a third-quarter decline from $47.9 million to $18.6 million, and a year-to-date drop from 102.3 million to $12 million. The company on October 30 announced its third quarter financial results, with the quarter ending September 30.
The costs associated with five start-up plants, higher feed prices and pork market volatility contributed to the Canadian food and agribusiness company's financial setbacks, Maple Leaf Foods President and CEO Michael H. McCain said.
"This is a very challenging period of transition for the Maple Leaf organization, as the short-term impact of volatile protein market conditions, combined with the significant cost of change, has been material," said McCain. "We have five significant operational start-ups occurring simultaneously, during a year when commodity markets have not been friendly. However, these transitory conditions do not detract from the underlying strength of the business or the strategic direction. Our commercial performance is solid and we are satisfied with the progress we are making in implementing our prepared meats strategy."
Maple Leaf Foods' protein group, which includes the operations of the company's meat products and agribusiness groups, saw its adjusted operating earnings suffer a loss of $20.1 million for the third quarter, compared to the $18.9 gain for the third quarter of 2012. Protein group sales for the third quarter declined 2.8 percent to $757.3 million for the third quarter from the $778.8 million recorded during the third quarter of 2012.
Earnings in primary pork processing continued to be negatively affected by the devaluation of the Japanese yen, which lowered profitability on export sales. North American primary pork processing spreads also contracted as live hog costs outpaced an increase in pork prices. Earnings in fresh poultry were consistent as lower primary processing spreads were offset by lower selling, general and administrative costs.
Earlier in October, Maple Leaf Foods sold Rothsay, its rendering and biodiesel business, to Texas-based rendering company Darling International. Maple Leaf Foods will use the proceeds from the Rothsay transaction to pay down its debt.