Prince Edward Island’s potato industry can expect a substantial blow this fall as french-fry giant McCain Foods moves to close its processing plant on the island by the end of October.
The New Brunswick company, which supplies fries to both the retail grocery and restaurant and foodservice sectors, announced Thursday it will “cease operations” at Borden-Carleton effective Oct. 31.
McCain opened the plant in 1991 at Borden-Carleton — later best known as the town at the east end of the Confederation Bridge, about 25 km south of Summerside.
The company on Thursday cited the “shift in growing demand for French fries from North America to other regions” as well as the impact of a stronger Canadian dollar over the past decade and “increased operating efficiency at (McCain’s) other facilities.”
The Borden-Carleton plant’s output has declined by two-thirds over the past decade, the company said Thursday, making it “the smallest and least utilized facility in McCain’s North American network.”
The plant has been running below capacity since at least 2008, when the company reportedly began dialing back its output, trimming shifts and laying off staff. [Related story]
McCain in 2010 was cited as saying no plans were afoot to shut Borden-Carleton, nor any of its other Canadian plants, which include sites at Grand Falls and Florenceville, N.B., Carberry and Portage la Prairie, Man., Coaldale, Alta. and Montreal.
P.E.I. Agriculture Minister George Webster was quoted on CBC in 2010 as saying he “would be personally very surprised if McCain’s left this province.”
“Closing a plant is one of the toughest decisions we ever face,” Frank van Schaayk, McCain Foods’ president for the Americas, said Thursday in a release, pledging “support and resources to those affected.”
McCain, he said, will now contribute “up to $2 million” in transitional support and will “work with the provincial government to identify economic development initiatives to create sustainable alternate employment for our affected employees and the Borden-Carleton community.”
The plant closure is expected to affect 121 McCain employees, who the company said will be offered supports such as severance packages “exceed(ing) regulatory requirements,” early retirement benefits where applicable, and/or retraining options.
Premier Robert Ghiz, in a separate statement Thursday, said Skills PEI plans to hold “information sessions” for plant employees in the near future.
Describing McCain’s plans as “regrettable news for the province, employees and the Borden-Carleton community,” Ghiz said an “action plan” will be developed for the area in coming weeks and months, but in the meantime, “our first priority is with the plant employees.”
P.E.I. farmers are estimated to have planted 90,500 acres to table- and processing-grade potatoes in 2014. Statistics Canada in 2011 pegged the number of potato farms in the province at 262, down from 330 in 2006.
According to the P.E.I. agriculture department, the island’s potato growers — who in 2013 reported a harvest of about 25 million hundredweight (cwt) — have booked potato-related farm cash receipts ranging from $203 million to $257 million per year in the past five years.
Most of the province’s processing-grade potatoes are handled either by the McCain plant or by the Irving Group’s Cavendish Farms fry plant at New Annan, just east of Summerside.
Ghiz said Thursday the province recognizes the “importance and significance” of the potato industry on the island and “look(s) forward to discussing the success of its future with industry leaders.” — AGCanada.com Network