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Maple Leaf Foods Launches Formal Process to Sell its Burlington, Ontario Primary Pork Processing Business

TORONTO, Jul 22, 2008 (Canada NewsWire via COMTEX News Network) — TSX: MFI

Maple Leaf Foods (MFI: TSX) today announced that it has begun the formal process of selling its Ontario pork processing business located in Burlington, Ontario. The process will entail a solicitation of interest from potential purchasers, commencing immediately. The Company anticipates that the sale process will be completed by the end of 2008.

“Our Burlington, Ontario business is well established, with long-standing customer relationships, a skilled and stable workforce and an excellent mix of value-added business,” said Michael Vels, Chief Financial Officer of Maple Leaf Foods. “It operates one of the more efficient pork processing plants in North America, strategically located close to high density markets. Our investments in the plant and our people have resulted in a profitable business that represents an excellent investment in the global pork processing industry.”

The 365,000 square foot Burlington facility has a processing capacity of up to 50,000 hogs per week, is located in close proximity to major domestic and U.S. markets, transportation routes and a skilled labour pool, and is licensed to export its pork products to nearly 50 countries worldwide. Maple Leaf has invested significant capital in this location over the past decade to develop a very extensive value-added business serving well-established domestic and international customers.

The decision to sell this business results from a re-focusing of Maple Leaf’s protein operations towards prepared meats, meals and bakery, involving divestiture or exit of several of its primary processing and agriculturally oriented businesses.

Maple Leaf Foods Inc. is a leading Canadian food processing company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the Company employs approximately 23,000 people at its operations across Canada and in the United States, Europe and Asia. The Company had sales of $5.2 billion in 2007.

Maple Leaf Consumer Foods
Burlington Pork Processing Facility

Facility Overview

  • A highly profitable operation, with a committed and skilled work
    force, and a very extensive value-added business serving well-
    established domestic and international customers.
  • The 365,000 square foot pork processing facility is the largest in
    Ontario (third largest in Canada), and has a processing capacity of
    up to 50,000 hogs per week.
  • The plant is strategically located on a 15-acre parcel of land in a
    large industrial park in Burlington, Ontario, within close proximity
    to domestic and U.S. markets, transportation routes and a deep labour
  • The facility is federally inspected by the Canadian Food Inspection
    Agency and is licensed to export its products to nearly 50 countries
    worldwide, including the United States, Japan, China and Russia.

Key Features

  • A highly advantageous location being in close proximity to densely
    populated markets and major transportation links – it has immediate
    access to major highways and has a market of 75 million people living
    within an eight hour drive of the plant.
  • A highly skilled, engaged and dedicated workforce of 1,200 employees,
    the majority of whom live within 15 kilometers of the facility.
  • The plant is profitable and highly efficient, approaching par in
    operating efficiencies when compared to the top eight U.S. facilities
    (as determined by Agrimetrics).
  • Currently processing an average of 42,000 hogs per week, Burlington
    is a high throughput facility, with the capacity and resources to
    process up to 50,000 hogs per week, providing excellent flexibility
    to optimize returns. Slaughter volume was 2.2M hogs in 2007 and
    volumes are expected to be consistent with this level in 2008.
  • Significant capital has been invested in the best available
    technology and practices in all areas of the plant since it was
    purchased in 1991, continuously improving the effectiveness and
    efficiency of the processing operations, including enhancements to
    the barn, cutting room, chilled and freezer capacity, refrigeration
    and security systems.
  • Burlington has an exemplary compliance record in environmental, food
    safety and health and safety performance.

SOURCE: Maple Leaf Foods Inc.

Michael Vels, Chief Financial Officer, Maple Leaf Foods Inc., (416) 926-2048