CANADIAN PRESS
01/12/2006
TORONTO - Maple Leaf Foods has hired RBC Capital Markets as a financial adviser to assist in the planned sale of its animal-feed and related businesses next year.
The company had said in mid-October that it planned to keep only those feed mills necessary to support restructured hog production operations.
Maple Leaf is trying to maximize the profitability of its meat businesses and recover what is estimated to be a $100-million annualized loss due to adverse currency movements.
In the October restructuring announcement, Maple Leaf cancelled plans to build a $110-million pork processing plant in Saskatoon and said it would wind down operations at an existing plant over the next three years.
The Toronto-based food processor said it would book charges of $80 million to $120 million over three years to rework its meat products and agribusiness operations and back out of the international fresh pork market.
The process to sell the animal nutrition business will begin in January.
"The decision to divest of this business results from a reorganization of the company's protein value chain operations, which includes our feed business, to focus on growth in the value-added meats and meals markets," chief financial officer Michael Vels said Thursday in a release.
"Operating a largely independent animal nutrition company is strategically not aligned to this new model."
Maple Leaf Animal Nutrition's brands include Shur-Gain in Eastern Canada and Landmark Feeds in Western Canada.
Excluding assets that will be retained to service hog production operations in Western Canada, the business has sales of about $650 million and provides a broad range of animal nutrition products and services including swine, dairy, beef, poultry, aquaculture and pet food. Its key research farm is at Burford, Ont.
Maple Leaf Foods employs about 24,000 people across Canada and in the United States, Europe and Asia. The company had sales of $6.1 billion in 2005.
