February 26, 2007
Canada's Maple Leaf: Less jobs and higher meat prices in 2007
Canada's Maple Leaf Foods Inc is warning of more job cuts and price rises for meat, animal feed and possibly bakery products to cover the increased cost of wheat and corn caused by the demand for ethanol.
The food processor announced on Feb 23 a fourth-quarter loss of US$11.6 million, from a year-ago profit of US$18.2 million, after spending US$44.9 million in restructuring charges and other costs.
The major exporter, already reeling from annual losses of about US$100 million caused by the strong Canadian dollar, has been grappling with rising grain prices. This increased the price of meat production, making consumer price increases in bakery and meat products inevitable, CEO Michael McCain said.
The company has recently gone through a restructuring, including facility closures, and has streamlined its management, marketing and information technology structure to cut costs in a bid to cover the currency gap.
The company started off on a rough note in 2006, but has been steadily fighting its way out of the currency conversion "hole" caused by a high Canadian dollar, McCain said.
Sales for the quarter were US$1.5 billion. For the year, profit fell to US$4.5 million, down from US$94.2 million a year ago.