Kellogg to shut Ontario plant next year
Cereal maker Kellogg Co. informed workers at its London, Ont. production plant on Tuesday morning the facility will be shuttered next year, confirming the move in a statement.
The move also includes plans to halt production at an Australian plant while expanding operations at the company’s Rayong, Thailand facility.
Calling the decision “difficult,” John Bryant, chief executive of U.S.-based Kellogg, said the cuts addressed “a compelling business need.”
Bryant said Kellogg would “help those who are impacted through their transitions.”
The announcement, made two weeks before Christmas, follows the decision last month by Kellogg to cut a fifth of its workforce at the facility, which employed more than 500 people.
At the time, Kellogg warned it was planning to move more production overseas by 2018, raising concerns among local union officials of more cuts to come.
The London facility produced ready-to-eat breakfast cereals distributed nationally and to other markets like the United States. Brands made at the plant included Special K, Corn Flakes and Rice Krispies.
The decision follows a similar one made by Heinz Co. last month to close its long-time food processing and packaging facility in Leamington, Ont., another town in southwestern Ontario that’s seen a quickening erosion of manufacturing jobs in recent years. That decision cost 740 jobs.
Canadian manufacturers, and in particular Ontario where many are located, have been hard hit by an elevated Canadian dollar in recent years that’s kept costs higher here than elsewhere, economists say.
Kellogg said the plans would streamline its global supply chain network as part of a plan called “Project K” aimed at “increasing growth in developing and emerging markets, and driving increased valued-added innovation.”
The company posted $14.2 billion in sales in 2012 and a profit of $961 million, according to its annual report to shareholders. Kellogg employs 31,000 globally.