Maple Leaf Foods on Thursday reported a net loss of $311.89 million on $4.739 billion in gross sales for its fiscal year ending Dec. 31, 2022, down from net earnings of $102.82 million on $4.521 billion in sales in 2021.

For its fourth quarter alone, the company booked a net loss of $41.49 million on $1.186 billion in sales, down from net earnings of $1.88 million on $1.12 billion in sales in the year-earlier period.

The past year “was clearly a year of unprecedented challenges for us on many fronts, including hyper-inflation, dislocation in the pork markets, supply chain dysfunction, job vacancies and a cyberattack,” CEO Michael McCain said in a release Thursday.

Despite all that, he said, “we have maintained a steady hand on executing our plans including aggressively building our sustainability platform, starting up over $1 billion of new assets and converting our plant-based business model to profitable growth.”

McCain said the company “continue(s) to see an inflection point in our business,” noting the ongoing startup of Maple Leaf’s new poultry processing plant at London, Ont.

The company also expects its nascent plant-based protein business is “on track to get to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) neutral or better” in the back half of 2023, he said.

The London poultry plant, construction of which was first announced in 2018 for completion in 2021, was delayed into 2022, reportedly due to wet weather and the COVID-19 pandemic. First budgeted at $660 million, the total capital spend on the new plant was pegged in Thursday’s report at $772 million.

By the end of 2023, though, the new London site is expected to have consolidated the work of five of the company’s existing Ontario poultry processing plants, four of which have been slated to be closed.

McCain told analysts on a conference call Thursday that the new London plant is expected to add $100 million to the company’s EBITDA margin on an annualized basis by the end of this year, whether the market dynamic seen in 2022 improves or not.

Another $30 million will be added to that figure during the ramp-up of the company’s “bacon centre of excellence” at its Lagimodiere Boulevard prepared meats plant in Winnipeg, also independent of the market dynamic.

The Winnipeg plant has seen expansions and upgrades in recent years for both bacon and ham processing, as the company consolidated that business from other plants across the country.

Its most recent “bacon centre of excellence” expansions, which included an additional smokehouse, two new pre-cooked bacon production lines and a new line for bacon bits and chips, involved a capital spend of $182 million, the company said Thursday.

Furthermore, company officials said exports to China have now resumed from Maple Leaf’s main hog slaughter and fresh pork cutting plant at Brandon, Man., following their suspension in 2020. The resumption of exports from Brandon to China will be “accretive to our earnings” starting early in the second quarter of 2023, the company said.

Maple Leaf and other companies are expanding back into the Chinese market just as demand for pork there is increasing and the pork supply from European exporting nations is seen to be declining, officials said.

The company said its “inflection point” will see a shift away from “pandemic-induced supply chain instability,” product prices lagging behind the current rate of inflation and a “sustained period of investing over $1 billion in new assets.”

Instead, Maple Leaf said it expects to see a transition this year to “supply chain stability.” Product pricing “to mitigate inflation” will be fully in place, also by the end of the second quarter of this year.

The company is also expecting “normalized” global pork markets, for which it said the “green shoots” are now visible.

“These unprecedented markets will normalize; they always do,” McCain said in Thursday’s release.

Maple Leaf in its fourth quarter also incurred an estimated $23 million in one-time costs from a ransomware attack on its computer systems in November.

The release of Maple Leaf’s 2022 ledger follows a report of losses from another major Canadian pork and poultry packer.

Quebec-based Olymel, the meat packing arm of Sollio Co-operative Group, in February reported a $445.7 million loss on $4.6 billion in sales for its fiscal year ending last Oct. 29. — Glacier FarmMedia Network

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Maple Leaf said Wednesday that in “pursuing further optimization opportunities,” it will shift poultry volumes now processed at Bradford and nearby Schomberg to the new London plant that’s now expected to be completed later this year.

For the next 18 months, work will continue as usual at Bradford and Schomberg, but volumes now handled at those two plants will be shifted to London by the end of 2023 as the new plant ramps up to full production, the company said.

Past that point, the Bradford plant “will continue to operate with a new focus on value-added opportunities,” Maple Leaf said. The plant at Schomberg, about 40 km north of Mississauga, will be shut down.

The company said it “expects to identify opportunities at other plants within the Maple Leaf network” for affected workers.

The Bradford and Schomberg plants came to Maple Leaf in 2018 and last summer, respectively.

Maple Leaf in 2018 bought the former Cericola Farms poultry plants at Bradford and at Drummondville, Que., along with a supply agreement for 100 per cent of the processed chicken volume from Cericola’s Sure Fresh plant at Schomberg. Maple Leaf then exercised an option to buy the Schomberg plant last June.

Maple Leaf during that time had already announced plans to consolidate its own poultry processing around the new London facility, by closing the former Schneiders plant at St. Marys, Ont., followed by its Toronto and Brampton poultry plants later this year.

The new London plant, a project also announced in 2018, was originally expected to be complete in 2021. However, a company representative told the London Free Press last fall that delays due to wet weather and COVID-19 have pushed that date to later in 2022.

Maple Leaf also sold off the former Cericola plant at Drummondville in 2020 to Quebec processor Volaille Giannone, which in turn closed it a few months later. — Glacier FarmMedia Network

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Nestle Canada said June 23 it expects to break ground in September for a 26,600-square foot expansion of its London, Ont. plant with “additional buildings, increased refrigeration capacity and other services to support the new capacity.”

The two new production lines, due to be completed by 2023, are expected to generate “more capacity for future growth, resulting in incremental ingredient, packaging, and raw material supplier purchases,” the company said, noting it bought over $45 million of dairy in the area in 2020.

The expansion follows reconfigurations in 2016 to boost the London plant’s capacity and flexibility for more product lines under the Haagen-Dazs brand, which has been processed there for the Canadian market since 1985.

A $51.5 million, 9,000-square foot expansion followed in 2018 “to create more capacity for future growth of Haagen-Dazs and other popular products.”

The latest expansion “allows us to bring even more exciting and innovative products to market and continue to meet consumer demand,” Jayne Payette, Nestle Canada’s president for ice cream, said in the company’s release.

The London plant, which today employs over 800 people, is expected to “create 88 new job opportunities” as a result, the company said. — Glacier FarmMedia Network

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The company said Tuesday it was “taking this step out of an abundance of caution as our local workforce deals with the community-wide impacts of COVID-19.”

CBC on Tuesday quoted a company representative as saying 82 active cases involve employees at the London plant, which reported a handful of cases a couple of weeks earlier.

According to Cargill, the plant employs about 900 people and has capacity to process about 100,000 southwestern Ontario chickens per day.

“This was a difficult decision for our team who are operating an essential service and are committed to delivering food for families across Canada and ensuring the resilience of our supply chain,” plant general manager Derek Hill said Tuesday in a release. “But ultimately, our employees’ safety and well-being come first.”

Cargill said it’s “working closely” with the Middlesex-London Health Unit and other public health officials to “ensure appropriate prevention, testing and cleaning in our facilities and that employees are following quarantine protocols at home.”

The company didn’t say how long it expects the plant to be offline, but a company spokesperson said via email that workers had processed all birds at the plant and Cargill is “working to send birds to other processors in the area.”

A representative for Chicken Farmers of Ontario wasn’t immediately available for comment Wednesday.

However, CFO on Monday announced it has set up a new emergency cull policy in the event of an “extended” decline in processing capacity.

CFO said its board, working with industry stakeholders and the Association of Ontario Chicken Processors (AOCP), had developed a COVID-19 emergency euthanasia policy and COVID-19 emergency euthanasia fund regulation.

The policy was drafted so as to “mitigate risks to farmer-members and industry in periods of potential extended plant shutdown or substantial impairment of chicken processing capability.”

“This is a measure of last resort and will never be an immediate response,” CFO chair Ed Benjamins said in Monday’s release. “The entire industry is committed to working tirelessly to avoid this measure when possible.”

CFO interim CEO Mike Nailor said the plan “will provide farmer-members with support in the event that birds cannot be processed as a result of COVID-19 and all other contingency planning options have been exhausted.”

CFO didn’t name any specific processor in its release, but said the COVID-19 pandemic “continues to impact the availability of labour in many sectors, and Ontario chicken processors are no exception.”

Some processors, CFO said, were seeing “increased labour absentee rates” that are “adversely impacting processing capability.”

As for the plant’s workforce, Cargill said Tuesday that employees will receive a weekly guarantee of 36 hours of pay.

The company emphasized it has made testing available to all its employees and is “reinforcing the importance of adhering to provincial stay-at-home orders.”

Cargill said it had encouraged any employees who were sick or exposed to anyone with COVID-19 in the last 14 days to stay home, and had offered up to 80 hours of additional paid leave related to COVID-19.

In the plant, measures such as temperature testing, “enhanced” cleaning and sanitizing, face coverings, screening between work stations, prohibiting visitors, social distancing where possible, staggered breaks and reducing carpooling “have been in place for months and will remain in place when we resume full operations.”

The London shutdown is not Cargill’s first COVID-related work stoppage in Canada. The company’s major beef slaughter plant at High River, Alta. was idled temporarily last April after an outbreak that infected hundreds of workers and killed two.

The company’s other major Canadian beef slaughter plant, at Guelph, Ont., was shut for almost two weeks last December following an outbreak infecting dozens of employees. — Glacier FarmMedia Network

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McCormick Canada, the Canadian arm of Baltimore-area condiment and spice maker McCormick and Co., on Monday announced it had completed a “multi-million dollar expansion” at its London, Ont. plant to blend, bottle and package French’s ketchup.

Bottling of French’s ketchup began at the London plant last month, the company said Monday, but added that “full production ramps up this week.” An exact dollar figure wasn’t given for the cost of the expansion.

McCormick said it would continue to source 100 per cent of its tomatoes for French’s ketchup in Canada from the Leamington, Ont. area and would continue to offer the product in four varieties: original, garlic, low-sodium, and no-sugar-added.

By bringing its ketchup line to London, McCormick said it would be “deepening its local roots” and transitioning away from a “third-party Canadian supplier.” The French’s line has been packed in Canada by Toronto-based Select Food Products since 2016.

McCormick has operated at London since 1959, when it bought the Club House brand of spices and extracts, a business founded there in 1883 by Gorman, Dyson and Co.

The French’s brand, along with Frank’s RedHot and others, came to McCormick in 2017 when it bought the food business of British consumer health and hygiene firm Reckitt Benckiser for US$4.2 billion.

Shortly before that sale, the French’s brand had made a splash in Canada by promoting its use of tomatoes grown in the Leamington area and by bringing the product’s bottling to Toronto.

Ketchup provenance by then had become a sore spot among some Canadian consumers, after Kraft Heinz shed its Leamington tomato processing plant in 2014 and began bottling its Heinz ketchup for the Canadian market at plants in the U.S.

Kraft Heinz sold the Leamington plant in 2015 to an Ontario consortium, Highbury Canco, and still sources some tomato products from the latter company. Kraft Heinz also announced last November it would resume packing Heinz ketchup in Canada for the Canadian market, this time at its plant in Montreal. –– Glacier FarmMedia Network

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Toronto-based Maple Leaf announced Monday it will build a 640,000-square foot plant at London, billed as “one of the most technologically advanced poultry-processing plants in the world, with leading-edge food safety, environmental, and animal welfare processes and technologies.”

Construction is expected to start next spring at a 100-acre site along London’s Wilton Grove Road, just south of Highway 401, toward a plant start-up in the second quarter of 2021.

“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,” CEO Michael McCain said in a release.

The new plant, he said, is expected to support over 1,450 direct full- and part-time jobs at first and ensure Canada has “sufficient domestic processing capacity to meet forecasted poultry production and demand.”

Chicken is the most consumed and fastest growing meat protein in Canada, Maple Leaf said, as it offers “versatility, nutrition and a lower environmental footprint.”

The company noted “particularly high demand for raised without antibiotics and halal chicken products, where Maple Leaf has the leading national brands.”

The new London plant “will address constraints in Maple Leaf’s current Ontario network, enhance operating efficiencies, and expand its value-added product mix and capacity to meet growing consumer demand.”

To that end, production from three “sub-scale and aging” poultry plants in Ontario will be moved to London, Maple Leaf said.

The company said Monday it will close the former Schneiders poultry plant at St. Marys by late 2021, and its Toronto and Brampton poultry plants by mid- to late 2022.

Those three plants are each 50 to 60 years old, Maple Leaf said, with “location, footprint and infrastructure constraints that limit opportunities to expand and modernize to meet growing market demand.”

The company said it will work with local communities and governments to find “alternate uses” for the three plants when they close.

“While these closures are several years away we are informing our people well in advance, allowing us to openly communicate and support them through this long-term transition,” McCain said.

The $660 million to build the London plant will include an investment of $34.5 million from the Ontario government, plus $20 million from the federal Strategic Innovation Fund and an $8 million loan from the AgriInnovate Fund, Maple Leaf said.

The federal funding agreement also calls for Maple Leaf to put up $5 million over the next five years on projects which “accelerate adoption of advanced manufacturing and production technologies and support the company’s goal to reduce its environmental footprint by 50 per cent by 2025.”

Ontario Premier Doug Ford on Monday described the London plant as “the largest investment in the history of Ontario’s agriculture sector” and added it will “help make Ontario’s chicken farmers more competitive.”

The London Economic Development Corporation (LEDC) said Monday it’s working with Fanshawe College, Brescia University College and other training institutions to develop “skilled talent for food and beverage processing, as well as quality assurance, nutritional sciences, product development and food chemistry.”

Wayne Hanley, president of United Food and Commercial Workers Local 1006A, which represents about 600 workers at the affected Toronto plant, said UFCW “will work to minimize the impact of this closure and to achieve the best possible outcome for our members as a result of this announcement.” — Glacier FarmMedia Network

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The CAS system, expected to be up and running this spring, “will help reduce handling stress with chickens, resulting in a higher-quality, more consistent product,” Claudecir Pagnussatto, the London plant’s general manager, said in a recent release.

The London plant, in business since 1987, has capacity to process about 80,000 chickens a day, supplying customers across Canada.

The move to the new stunning system is meant to help address “growing interest from customers and consumers for continuous improvement in humane handling of food animals,” the company said.

Both electric and CAS stunning systems are “approved, proven and acceptable” for humane poultry harvesting, Cargill said, but “a growing number of consumers and customers are expressing a desire for CAS systems at poultry facilities.”

To stun birds — that is, to render them unconscious before slaughter — using CAS involves depriving birds of oxygen in their transport crates, by introducing high concentrations of carbon dioxide or a mixture of inert gases.

Animal welfare organizations such as the Humane Society of the United States and PETA have previously pressed for chicken processors to drop electrical stunning in favour of CAS systems.

U.S. livestock handling expert Dr. Temple Grandin, in a 2013 evaluation of CAS against electrical stunning for poultry, wrote that while insensibility “is not instantaneous” for birds in a CAS system, “overall bird welfare would be improved with gas stunning even if there is some discomfort before the bird loses consciousness.”

If the reactions from chickens to a CAS system are “limited to gasping and head shaking only,” it “would probably be less distressful to the birds than live shackling” for electrical stunning, she wrote.

Grandin, in her evaluation, recommended any commercial-grade CAS system include windows or cameras to allow for direct observation of its performance, which is “the only way to verify that a commercial system is inducing insensibility with a minimum of discomfort.”

Cargill bills itself as a “pioneer” in the use of CAS, having introduced it at a U.S. turkey processing facility more than a decade ago.

Dr. Stephanie Cottee, Cargill’s global head of poultry welfare in London, said in its release that the company is committed to “ensuring the highest standards of animal welfare are maintained and believes all food animals deserve respect and dignity prior to harvesting.” — AGCanada.com Network

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The company’s London, Ont. ice cream plant, which has operated since 1966 and supplies brands such as Haagen-Dazs, Drumstick, Parlour and Skinny Cow for all of Canada, is in the midst of a four-phase, $51.5 million renovation.

Groundwork has already begun for the phase announced Friday, which the company said will boost the factory’s footprint by 9,000 square feet “to create more capacity for future growth of Haagen-Dazs and other popular products.”

The expansion is expected to be operational early next year, the company said in a release, creating 12 “new job opportunities” and shifting 45 jobs from seasonal part-time status to full-time employment.

Swiss-based Nestle, which has operated in Canada since 1918 and has its Canadian head office at North York, Ont., didn’t specify Friday how much more milk the London plant will require, or by how much the expansion will boost its capacity.

However, it said the “resulting production” from the expansion “will increase ingredient, packaging and raw material supplier purchases,” and noted it’s “one of the largest purchasers of Canadian dairy for its extensive portfolio of market-leading products.”

The London plant’s overhaul began in early 2016 with “reconfiguration and consolidation of production lines to increase its capacity and flexibility for Haagen-Dazs.” Nestle has produced the Haagen-Dazs brand for North America under license from the Pillsbury Group since 2002.

In its second phase, the London plant added a second production line for Drumstick, “to further meet the ever-increasing demand for the popular frozen treat.” Nestle has made Drumstick cones since it bought the Drumstick Company in 1991.

The third phase, Nestle said, “helped to modernize the existing processes to allow for greater flexibility within the production lines.”

The Ontario government, through its Southwestern Ontario Development Fund, announced Friday it has put up $390,750 toward the expansion, “supporting an additional investment of $2,214,250 from the company.”

The development fund money, Nestle said Friday, went specifically into “an early phase of the investment which enhanced the cleaning technology for each individual production line, a step that was essential to the success of the expansion.”

Ontario Agriculture Minister Jeff Leal said Friday the province’s funding “is helping create good jobs and economic opportunities for workers, dairy farmers and communities throughout the London area.” — AGCanada.com Network

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The German food firm announced Tuesday it will close the former McCain Foods frozen pizza plant it leases and operates at Grand Falls, about 180 km northwest of Fredericton.

The company said about 70 per cent of the pizza production from Grand Falls will be moved to the new Hub production plant it owns at London, Ont.

The remainder of the production will go to another former McCain plant Dr. Oetker runs at Lodi, N.J., just west of Hackensack.

Dr. Oetker said the retail food climate in which it operates has become “increasingly challenging” in terms of price and cost in recent years.

“There is nothing our Grand Falls employees could have done differently,” Dr. Oetker executive vice-president Cecile Van Zandijcke said in a release Tuesday. “Food manufacturers have been facing severe economic pressures over the last few years and today’s market has become ultra-competitive.”

Dr. Oetker on Tuesday pledged severance for the plant’s employees and medical and dental benefits to the end of 2018, plus a $4 million Grand Falls Community Fund to help with job retraining and economic development.

The Grand Falls and Lodi operations came to Dr. Oetker in 2014 when it bought McCain’s North American frozen pizza business and a two-year licence for the use of the McCain brand name in Canada.

McCain had built and opened the Grand Falls plant to enter the frozen pizza business in 1976, and expanded the plant in 2004.

Dr. Oetker, which makes the Ristorante, Casa di Mama, Giuseppe and Tradizionale pizza brands, put up $113 million to set up its London pizza plant and warehousing operation in 2014.

The company, whose Canadian businesses also include Dr. Oetker baking ingredients and dessert mixes and Shirriff puddings and pie fillings, had previously shipped its frozen pizzas to North America from overseas at a rate of 75,000 pizzas per day. –– AGCanada.com Network

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The province has appointed business, municipal and indigenous groups to the board, but farm organizations, such as the Ontario Federation of Agriculture (OFA), are calling for representation of their interests.

“It goes across our land, our farmland, so we should be consulted on how it is going to impact us,” said Crispin Colvin, a director-at-large with the Ontario Federation of Agriculture. “We can be part of the solution, but the government has to include us.

“You wouldn’t build a high-rise in the city without consulting all the other people around it, why would government not be willing to consult farmers?”

OFA president Keith Currie has requested agriculture involvement through the agriculture minister’s office, he said.

Colvin represented the OFA at a town hall meeting at the Purple Hill Country Hall east of London late last year. More than 250 farmers and rural residents attended the meeting organized by Thames Centre Coun. Kelly Elliott, with help from local OFA associations.

The provincial government has ordered a $15 million environmental assessment of a high-speed rail line from Windsor to Toronto. There have been four years set aside for the environmental assessment, then construction from London to Toronto, through Kitchener, from 2022 to 2025, with the Windsor-to-London line ready by 2031.

Farmers are worried because, with the line running at up to 250 km/h, there can be no road crossings and the line will be fenced off from animals and people. With overpasses only at major roads, that means farming systems tied by back roads for generations will be cut off. The system would also adversely affect wildlife. Each mile of new track would take 12 acres of land, most of it farmland.

George Taylor, farmer and owner of the Purple Hill Country Hall, gave the example of his son, who hauled corn from a 200-acre property nearby.

“He would go down the 5th and up the sideroad to Triple D Farms,” said Taylor, but the high-speed rail line would cut through the middle of that route and add 10 to 12 miles to his trip.

There are also concerns about school busing, road plowing and emergency response times with so many roads cut off.

“This is nothing but an election ploy and we’re having to fight it with our lives,” Taylor told the meeting.

The only current proposed route from London to Kitchener is along the electricity corridor between the two cities.

The ability to move more people to Toronto from further away from the city is contrary to the province’s goal of creating “complete communities” where people live and work, Colvin said.

There have been few studies anywhere of the rural impacts of high-speed rail, he said, other than one which talked about such impacts in a proposal for a link between Calgary and Edmonton.

“An agricultural impact assessment has to be done for this project,” he said.

There are alternatives, said Ken Westcar, a transportation activist, who said that the real problem is with VIA Rail and the fact that it has to run on Canadian National and Canadian Pacific rail lines where freight traffic gets the priority.

Putting in a dedicated passenger line beside the freight lines would be a first step. Buying faster trains that run at the rail’s capacity would be another.

Restoring VIA trains that were cut by the federal government cost-cutting in 2012 would also help, said Westcar, who called the VIA Rail board of directors an “ossified dumping ground for Liberal hacks.”

Some at the meeting called the high-speed rail technology “outdated” as the first high-speed rail lines were built in the 1960s. There are several groups around the world rapidly developing the hyperloop concept, where a passenger car would ride inside a depressurized tube, floating along with magnetic propulsion at up to 1,000 km/h. The tube can be either above or below ground.

There are no hyperloops operating yet, but U.S.-based Hyperloop One is aiming for a 2021 start somewhere in the world.

A Toronto company, TransPod, is also hoping to build hyperloops, and it has said it should be able to build a hyperloop from Windsor to Toronto for half the price and two-thirds the operating costs of high-speed rail.

Colvin pointed out that the reports written by David Collenette, former federal transport minister and high-speed rail advocate, say other technologies may supersede high speed rail and shouldn’t be ignored.

Elliott invited the provincial transportation ministry’s High Speed Rail Team to attend the meeting, but they declined. She encouraged farmers to give input by emailing highspeedrail@ontario.ca and by talking to their local MPPs.

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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