Maple Leaf Acquires Schneider's Winnipeg Fresh Pork Operations
TORONTO, ON - Maple Leaf Foods announced today that it has reached an agreement with Schneider Corporation (Schneider) to acquire Schneider's fresh pork operations in Manitoba. The transaction is expected to close in late February 2001, subject to regulatory approvals.
The acquisition involves two Winnipeg plants; a slaughter facility on Marion Street that processes 18,000 hogs per week and a new cut plant built for $30 million in the mid-1990s located on Warman Road. The Warman Road facility further processes the hogs from the Marion Street plant plus 14,000 hogs per week, supplied by third-party facilities, into value-added pork products.
The plants operate profitably, and have annual sales of about $300 million. The purchase price is $34 million for fixed assets and approximately $10 million for net working capital. The Company expects the acquisition to be accretive to earnings in 2001.
"Maple Leaf is very committed to building a world-class pork industry in western Canada. Over the past three years we have invested over $400 million in Manitoba," said Michael H. McCain, President and Chief Executive Officer of Maple Leaf Foods. "For the next several years we will continue to operate the plant on a business-as-usual basis. As Brandon moves to a second shift, primary processing will likely be consolidated into that operation."
"Long-term, we are highly optimistic that the Warman Road plant has a bright future as a specialized cutting facility for unique markets," said Mr. McCain. "There is rapid growth in the demand for case ready products and Asian market demand for custom products is also strong. A specialized cutting facility would allow us to make the most of those opportunities."
Maple Leaf will honour all existing relationships including contracts with hog producers and suppliers as well as collective agreements. The operation will continue to be run by its current management and all Schneider employees affected by the transaction will have the opportunity to become Maple Leaf employees.
Maple Leaf Foods employs more than 2,000 people in Manitoba through its operating companies; Maple Leaf Pork, The Landmark Group, Elite Swine Inc., Maple Leaf Consumer Foods and Rothsay Rendering.
Maple Leaf Foods Inc. is a leading global food processing company. Headquartered in Toronto, Canada, the company employs more than 13,000 people at its operations across Canada and in the United States, Europe and Asia. Maple Leaf Foods reported sales of $3.5 billion in 1999.