The business will shut its site in North Bay, Ontario, and shift production to other bakeries in Ontario and Quebec, where it says there is available capacity with improved speed and efficiency.
Operations are to be gradually wound down at the 30,000 square-foot North Bay factory – which makes rolls, buns and sliced bread - and production is set to cease on August 5, 2016.
The site’s 62 staff will receive severance packages, as well as personal counseling and ongoing outplacement services and workshops, said the company, adding that it will also encourage staff to seek employment at other Canada Bread facilities.
“Our industry is under mounting competitive pressure to become more efficient and this means we have to make very difficult decisions,” said Canada Bread vice president of operations Jennifer Park.
'This is the business reality'
“While this is the business reality, it is hard to make the necessary changes, particularly in a community where we have such a strong presence. We are doing everything possible to ease the impact on our people.”
Grupo Bimbo bought the Canada Bread Company for C$1.83bn ($1.4bn) in 2014, taking on its bakeries across Canada, the US and UK. The Mexican bread giant increased its Canadian presence later that year with the acquisition of Saputo Bakery, via Canada Bread, for C$120m ($103m).
Canada Bread Company produces and distributes packaged fresh bread and bakery products under brands including Dempster’s, Villaggio, POM, Bon Matin, Ben’s, Healthy Way, McGavins and Vachon. It employs approximately 4,500 staff across Canada and distributes products through a network of more than 1,200 routes.
Last month, Grupo Bimbo told analysts a key focus for the company’s North America division (which includes Canada) would be improving efficiency, after reporting a 21% year-on-year hike in net sales of the North American business.