Improved Profit Margins Expected in Maple Leaf

CANADA - Maple Leaf Foods is confident a Comprehensive Value Creation Plan approved by the company's board of directors last week will boost profit margins by 75 per cent over the next five years, writes Bruce Cochrane.
calendar icon 13 October 2010
clock icon 3 minute read

Last week Maple Leaf outlined details of a comprehensive five year value creation plan designed to reduce costs, improve efficiency and boost profits.

The plan, which was unanimously approved by the Company's Board of Directors, builds on a strategic direction approved by the board in September 2009 and will see a rationalization of the company's network of 24 processed meat plants and the products those facilities produce.

Maple Leaf spokesperson Linda Smith says the plan focuses on improving efficiency and building shareholder value.

Linda Smith-Maple Leaf Foods

I'd say over the last two years the change in currency hit most Canadian manufacturing.

I think another thing we're looking at is the rising commodity prices which certainly all food companies are looking at and we're going to have to pass eventually some of those costs onto the consumer with rising food prices and certainly the listeria tragedy did require a lot of attention from the company over the last two years where we saw food safety become and even more important focus and a key source of time and energy and now it's time to refocus back on the processed meat facilities.

We did build a lot of the efficiencies that we're looking at in primary processing.

A number of years ago when the Brandon facility which was a greenfield facility at the time it was built then double shifted, immense efficiencies there and we're looking to bring that kind of efficiency into the processed meats network which again has 24 plants currently.

The cost reduction efforts are expected to boost Maple Leaf's profit margins by 75 per cent over the next five years.

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