TORONTO — Canada Bread Company, Ltd. said it plans to close its bakery in Shawinigan, Que., citing a desire to “improve efficiencies in the company’s network by reducing overhead and supporting a focus on higher margin products and new market opportunities.”
The Shawinigan bakery produces a variety of snack cakes under the Chevalier, Cadbury and Obsession brands. The closing, which is scheduled for May 3, will affect 74 employees, Canada Bread said.
“We have experienced a significant decline in consumer demand for snack cakes in recent years,” said Richard Lan, president and chief executive officer of Canada Bread. “We are conducting a strategic review to identify category expansion opportunities. Based on the outcome of this work, there could be potential in the future to utilize this plant to support other manufacturing requirements. However, based on declining capacity utilization we have no alternative but to close the facility. We deeply regret the impact this decision has on our people and are committed to supporting their transition to new employment.”
The company said closing costs to be incurred in 2013, including severance, decommissioning and asset write-downs, are expected to amount to approximately C$3.1 million before tax, C$1.6 million of which represents cash expenses.Canada Bread operates 24 bread and cake plants and 2 pasta plants, according to the 2012 Directory & Buyers Guide published by Sosland Publishing Co.