Maple Leaf Foods Completes Construction of its New World-Class London Poultry Plant and is On Track to Start Production in Q4 2022

Sep 30, 2022

MISSISSAUGA, ON, - Maple Leaf Foods Inc. ("Maple Leaf Foods" or the "Company") (TSX: MFI) today confirmed that it has completed construction of its new, state of the art, value-added poultry plant in London, Ontario, slightly ahead of schedule. Equipment testing has begun and new people are being hired to enable production start-up on schedule in Q4 2022.

"I am incredibly proud of our team for achieving this important milestone ahead of schedule in a very challenging environment," said Michael H. McCain, Chief Executive Officer. "As we get closer to commercial production, we know we are well on our way toward realizing the benefits and returns on this $772 million strategic investment. We expect the plant to generate approximately $100 million annually of incremental Adjusted EBITDA on a run-rate basis once production is fully ramped up around the end of 2023. This landmark investment in one of the largest, most technologically advanced poultry processing facilities in the world, is yet another example of how Maple Leaf Foods is strategically positioned to serve growing markets, while remaining true to its sustainability commitments."

Chicken continues to be the most consumed and fastest growing meat protein in Canada, offering versatility, nutrition and a lower environmental footprint. There is particularly high demand for raised without antibiotics and halal chicken products, categories where Maple Leaf Foods has a strong collection of leading national brands, including Maple Leaf Prime® and Mina®. With a footprint of 660,000 square feet, or the equivalent of over 11 football fields, combined with leading-edge innovation and technology, the London Poultry plant provides Maple Leaf Foods flexibility and capacity to meet growing demand.

"Our investment in industry-leading food safety, environmental and animal care technologies will allow us to efficiently deliver a premium mix of value-add poultry products to meet steadily growing consumer demand, while also strengthening Canada's food system and advancing our vision to be the most sustainable protein company on earth," said Curtis Frank, President and Chief Operating Officer. "London Poultry is truly a next generation plant that exemplifies Maple Leaf Foods' approach to delivering shared value for all stakeholders."

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Video: Wheat Yields in USA and China Threatened by Heat Waves Breaking Enzymes

A new peer reviewed study looks at the generally unrecognized risk of heat waves surpassing the threshold for enzyme damage in wheat.

Most studies that look at crop failure in the main food growing regions (breadbaskets of the planet) look at temperatures and droughts in the historical records to assess present day risk. Since the climate system has changed, these historical based risk analysis studies underestimate the present-day risks.

What this new research study does is generate an ensemble of plausible scenarios for the present climate in terms of temperatures and precipitation, and looks at how many of these plausible scenarios exceed the enzyme-breaking temperature of 32.8 C for wheat, and exceed the high stress yield reducing temperature of 27.8 C for wheat. Also, the study considers the possibility of a compounded failure with heat waves in both regions simultaneously, this greatly reducing global wheat supply and causing severe shortages.

Results show that the likelihood (risk) of wheat crop failure with a one-in-hundred likelihood in 1981 has in today’s climate become increased by 16x in the USA winter wheat crop (to one-in-six) and by 6x in northeast China (to one-in-sixteen).

The risks determined in this new paper are much greater than that obtained in previous work that determines risk by analyzing historical climate patterns.

Clearly, since the climate system is rapidly changing, we cannot assume stationarity and calculate risk probabilities like we did traditionally before.

We are essentially on a new planet, with a new climate regime, and have to understand that everything is different now.