Maple Leaf takes an axe to pork operations
CANADA - A decade ago, Maple Leaf Foods Inc. thought it had latched on to a winning strategy. But the shifting tides of the global economy had other ideas.
13 October 2006
2 minute read
Canada's largest food processor announced yesterday a major overhaul of its business, abandoning its old strategy, which was dominated by the production of fresh pork for international markets, in favour of a more streamlined, value-added approach, focusing on further-processed meat, such as sausages or prepackaged cuts, and meal brands.
The company said the sharp appreciation of the Canadian dollar, along with shifts in the global pork market, changed the landscape so drastically that it had little choice but to rebuild itself. "We were in the fresh pork business for the purpose of selling fresh pork to the world," Michael McCain, president and CEO of Maple Leaf, said yesterday as he explained the major strategy shift to the investment community. "The architecture was predicated on having a globally competitive cost structure."
But a 40-per-cent appreciation of the Canadian dollar against its U.S. counterpart in the past three years undermined its business model.
Source: The Globe And Mail
