Weston shifting capital spending toward United States

by Eric Schroeder
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TORONTO — George Weston Ltd. plans to direct more of its capital expenditure spending toward the United States and away from Canada in 2013 and going forward in the next few years, Pavi Binning, president of George Weston Ltd., told analysts as part of the company’s May 7 conference call to discuss first-quarter results.

Mr. Binning said the company plans to focus its capital spending on building capacity in growth areas as well as replacing the capacity in existing facilities that no longer need it. Asked whether he sees more of that activity happening north or south of the border for the Toronto-based company, he responded, “We see it more south, I would say.”

He cited several examples of the company’s efforts, including the recent opening of ACE Bakery, L.L.C.’s 60,000-square-foot bakery in Gaffney, S.C. ACE, a subsidiary of George Weston, said the opening will allow the company to continue to supply artisan baked bread, including baguettes, bread and rolls, to retail and food service sectors throughout the United States, with a focus on the East coast.

The bakery is designed to produce par-baked bread. Eventually it will produce bread 24 hours a day, seven days a week and 365 days a year. At full capacity the bakery will be able to make 32 million baguettes a year. With future expansion in mind, ACE Bakery bought 10 acres of land surrounding the bakery. The current building has 10,000 square feet of unused space.

Mr. Binning cited two other examples of capital spending being put to use in the United States.

“We’ve just put a new state-of-the-art donut line into Maplehurst (at Brownsburg, Ind.),” he said. “Again, volume related. We’ve seen good growth in the donut volumes in the United States. And also in Carrollton (Ga.), we’ve expanded our cake capacity.”

He continued, “So, either growth related or where we need to upgrade facilities is where our focus is in terms of capital as we move forward.”

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