Closure of Maple Leaf Foods poultry plant in Canard, N.S., hits economy hard

CP Wire Wed 17 Jan 2007 Section: Business Byline: BY JOHN LEWANDOWSKI

HALIFAX (CP) A day after Maple Leaf Foods announced it was closing its poultry processing plant in the small Nova Scotia community of Canard, union and local government leaders wondered what the future holds for the area.

When Toronto-based Maple Leaf Foods (TSX:MFI) shuts down its plant in April, 380 people will lose their jobs.

"It's going to be a big blow. We had no idea it was coming," said Blair Benjamin, a plant employee who has been working for the United Food and Commercial Workers Union for the past nine months.

He said the announcement came out of nowhere.

"We've had talks about the future of the plant, about whether they were going to restructure or rebuild it, but at no time was there ever any discussion that they were going to close it."

Union officials are gathering information before a general meeting of workers on Sunday.

Maple Leaf Foods, which is restructuring operations to improve its finances, has said the plant is more than 50 years old and isn't productive enough to justify a major reinvestment. The plant supplies fresh poultry primarily to Atlantic Canada.

King's County Warden Fred Whalen said agriculture underpins the local economy and the announcement, coupled with ongoing problems in the pork industry, couldn't have come at a worse time.

"It's an $11 million payroll that's about to disappear," he said in an interview from his home Wednesday.

"You do that spinoff thing and it will cost local businesses, including supplies, car dealers, restaurants, and theatres, about $39 million." Environment Minister Mark Parent, who represents the area in the legislature, suggested Tuesday that the province may be willing to step in an assist should the area's other large processor, ACA Co-Operative Ltd. of Kentville, want to increase its output and hire some of the laid off workers from Maple Leaf Foods.

Officials at ACA indicated they are willing to listen, but there could be competitive pressures that it would have to consider.

"ACA does have the capacity to process all the chicken produced in Nova Scotia at this time," said company spokesperson Monica Cumby.

"If Maple Leaf is still shipping into the market from Ontario, or wherever, the issue that we have to look at is can we profitably market that extra production."

Cumby said no formal meetings have been set up to discuss the company's options.

It will cost Maple Leaf $8.5 million to close the plant when severance, decommissioning and write-downs are included.

About $3 million of the restructuring charge will be booked in the 2006 fourth quarter results, which the company will report in a few weeks. The rest of the charges will be taken this year when the plant is shut down.

Maple Leaf employs another 900 employees in its meat and bakery operations in Nova Scotia.

The company, which recorded sales of $6.1 billion in 2005, employs 24,000 people across Canada and in the United States, Europe and Asia.

© 2007 The Canadian Press