Overcapacity is at the heart of Saskatchewan Wheat Pool’s decision last week to close two bakery-products plants in Quebec and Ontario.
“The bottom line is simply that we have overcapacity and we needed to consolidate our operations in Eastern Canada,” said Bill Hunt, executive vice-president of the food and industrial services group of the pool.
The plants, part of CSP Foods, made icings, fillings and other supplies for the baking industry.
“Since we’ve been involved with these businesses we’ve seen consolidation of both customers and competitors, so the market environment does change. But we also needed to do something about the cost side of the business,” Hunt said.
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Production will now be centralized in Etobicoke, Ont., and distribution will be handled by the Mississauga, Ont., facility.
The plant closures in La Prairie, Que., and Colborne, Ont., plus the closure of a distribution centre in Moncton, N.B., will lead to the layoff of 119 people.
“Letting employees go is always a difficult decision, but we had to change the way we do business to successfully compete and that resulted in some job losses,” said Hunt in a news release.
A few employees might have the opportunity to move to the Etobicoke plant, but most are receiving severance packages, career counseling and job placement services.
