By Pepper Parr
BURLINGTON, ON October 24, 2011 Maple Leaf Foods announced yesterday that they are going to close the Burlington distribution and refrigeration plant on Harvester Road sometime 2013, which will mean the expected loss of 87 jobs.
Maple Leaf announced at the same time a massive expansion into the Red Valley Business Park in Hamilton where more than 1,500 jobs will be created. The announcement of the Hamilton move just may be the beginning of a stretch of economic growth that Hamilton needs if it is every going to shed its steel manufacturing industrial base.
Given that Burlington has had a working relationship with Maple Leaf Foods for some time one wonders if this city was ever in the game for the expansion? We certainly have the land and the Paletta people do know how to take advantage of an opportunity.
Hamilton did have a leg up on this one with the Canada Bread operation also being set up in the Hamilton community as well. The municipal taxes on the meat processing plant will amount to $2 million annually.
The Maple Leaf announcement was brought about by that city’s Economic development department which is an in house operation. The Burlington Economic Development Corporation is an arms length organization that has council representation on it.
A 150 year old corporation that plays a significant role in the Burlington economy. Should a slughterhiuse be in this location?
There are some who feel that there is a bit of a silver lining in the announcement for Burlington and that is Fearman’s could take up the Maple Leaf Foods space which is immediately adjacent to their property on Harvester Road abutting the Applyby GO station. The question for the city is – does Burlington really want a slaughter house right in the middle of an industrial part of town and next to a GO station?
Burlington will begin reviewing its Official Plan in 2012 and that question is sure to be asked. The Strategic Plan, that city council will pass within a week, sheds no light on industry specifics, but does talk about prosperity and those elusive high tech, high paying jobs. Nothing high tech or high paying about a slaughterhouse; but without them, bacon and eggs, and a ham at Easter won’t happen.
The F.W. Fearman’s brand is over 150 years old. So, it’s not only the oldest continuously operating pork processing plant in Canada, but also the first of its kind in the country. It was established in 1852, in Hamilton, Ontario, by F.W. Fearman, a dealer in sugar-cured hams and smoked meats.
Fearman’s sits on a site immediately to the west of the Maple Leaf plant and were the object of one of the more misdirected protests the city has seen in some time. Nearly 20 Toronto Pig Save supporters picketed the Fearman plant early in October. “We’re talking about how animals are inhumanely treated,” said Patti Blersch. “I live in Burlington and one of Ontario’s largest slaughterhouses is down the street.”
Blersch wore a pink pig costume while protesters also spread their message with signs, pamphlets, a megaphone and video-audio display. They plan more protests in Burlington, said one of the animal rights group’s founders. She claims 8,000-9,000 pigs are killed each working day at Fearman’s.
Fearman’s is an affiliate of Sun Capital Partners Inc., a Boca Roton, Florida hedge fund that has recently provided significant amounts for the upgrading of plant and equipment at the Burlington location.
Obviously a major hydro user and also a company that is well funded and in a postion to grow their operation if the market demand is there.
“The Ontario pork processing business is an impressive facility with significant potential to increase production levels. We are fully committed to growing the business, bringing our investment experience in the food processing industry to bear, working closely with hog suppliers and serving the markets with top-quality products. We believe there is opportunity to further expand into international markets and build out the company’s market share for specialty and value-added products,” said Anthony Polazzi, Principal at Sun Capital Partners. “Maple Leaf Foods will continue to be an important customer as we move forward.”
“This sale will complete the transformation of our fresh pork operations to focus our growth on branded, consumer-focused prepared meats and meals business,” said Michael Vels, Chief Financial Officer of Maple Leaf Foods. “We are very pleased to have secured a buyer who will continue to operate the facility, providing ongoing employment to a highly skilled workforce, and an important market for Ontario’s hog producers.”
Sun Capital has approximately $8 billion of capital under management and often bridges the entire purchase price at closing, raising permanent debt financing afterwards.
The company targets companies with up to $5 billion or more of revenues, but many of the transactions are with businesses with sales between $50 million and $500 million. A staff of approximately 150 people and a decisive approach to business enables them to close deals within 30 days compared to three to six months for most other buyers. Appropriate acquisition and investment targets may include private businesses, divisions of larger companies, and publicly-traded companies.
Fearman’s is clearly owned by people with very deep pockets – so buying up the Maple Leaf plant is not a financial problem. A reliable source in Burlington’s financial community suspects conversations between the two are already taking place. Should that happen – the jobs lost through the Maple Leaf closing would be more than made up with a Fearman’s expansion.
