Nov 26, 2018
Maple Leaf to build $660M poultry plant in Ontario with help from feds and province
Maple Leaf Foods announced late Monday it will build a $660-million poultry plant in London, Ont., with a helping hand from the federal and provincial governments.
Construction of the 640,000 square-foot processing plant will begin next spring, and the facility is expected to be up and running in the second quarter of 2021.
Maple Leaf Foods (MFI.TO) said in a release the plant will support more than 1,450 jobs initially, with additional employment opportunities anticipated as production ramps up. Three hundred workers are expected to work on construction of the plant, which the company estimates will eventually lead to the creation of 1,400 indirect jobs.
Meanwhile, Maple Leaf also said it will shutter three other plants in Ontario by late 2022, although its CEO vowed to offer job opportunities to workers affected by the closures.
The news was announced just a few hours after the province of Ontario was left reeling by General Motors' decision to put its Oshawa plant on the chopping block.
An aerial view of the future Maple Leaf Foods poultry facility location in London, Ontario. (CNW Group/Maple Leaf Foods Inc.)
"This world-class facility will enable Maple Leaf to meet the steadily growing consumer demand for premium, value-added poultry products, and strengthen Canada's food system," said Maple Leaf Foods President and CEO Michael McCain in a release.
"This is a historic investment in the Canadian poultry sector, providing significant stakeholder and economic benefits and ensuring that Canada has sufficient domestic processing capacity to meet forecasted poultry production and demand," he added.
Maple Leaf Foods will cover $605.5 million of the investment costs, while the province of Ontario will invest $34.5 million. The federal government will kick in $20 million via its Strategic Innovation Fund.
"This is the largest investment in the history of Ontario's agriculture sector, it demonstrates industry confidence in our growing economy, and it's another example of how we're making Ontario open for business," said Ontario Premier Doug Ford in a release.
Maple Leaf Foods said it expects the new plant will boost its earnings starting in 2022 and will provide $1.2 billion in economic benefits every year.
"Once constructed, this new poultry facility will be a significant contributor to our overall adjusted EBITDA margin target and will provide tremendous long-term strategic value in an important growing component of our business," McCain said in the release.
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