Facing a “less than ideal environment” to try and sell its pork processing plant at Burlington, Ont., Maple Leaf Foods plans to hang onto the facility, likely until sometime next year.
“Despite active negotiations with several prospective purchasers, current economic conditions and credit markets have made it difficult to complete a satisfactory sale,” the company said in a release Thursday.
“As a result, the company does not plan to continue a formal sale process until markets rebound, which will likely not be before early 2010.”
Besides, “there is no immediate urgency to selling the Burlington business,” Maple Leaf CFO Michael Vels said in the company’s release.
“It is an efficient and profitable business and we want to ensure we negotiate an offer that recognizes the appropriate value for the business and meets the expectations of our shareholders.”
Maple Leaf had started the formal process last summer to put the plant up for sale, expecting to complete a deal by the end of 2008.
Its ownership of the plant at Burlington, northeast of Hamilton, had previously been tentative at best since the company announced a major reorganization of its meat processing (or “protein”) operations in October 2006.
That process saw Maple Leaf shut or sell several plants across Canada, sell other related businesses and generally shift the company’s focus toward prepared meats, meals and bakery goods.
“The Burlington facility is the largest processing plant in Ontario and a very important business to the province and the industry, and over time we will identify the best option to realize its value and full potential,” the company said when it announced the reorganization in 2006.
The Burlington operation is “one of the more efficient pork processing plants in North America, strategically located close to high density markets,” Vels said last July.
But the ultimate goal of the reorganization was for Maple Leaf to meet all its future requirements for fresh pork through just one pork slaughter and processing plant at Brandon, Man., supported by that plant’s expansion to a double shift.
The company said Thursday that the Burlington plant’s sale “remains an important element of Maple Leaf’s protein business transformation.”