Maple Leaf Foods to build C$660 million poultry facility in Ontario
The new 640,000 square feet facility is expected to be one of the most technologically advanced poultry-processing plants in the world, with leading-edge food safety, environmental, and animal welfare processes and technologies.
Funding for the project includes a capital investment of approximately $605.5 million from Maple Leaf Foods, an investment of $34.5 million from the Government of Ontario and a $20 million investment from the Government of Canada under the Strategic Innovation Fund.
In addition, the company is receiving a $8 million loan from the AgriInnovate Fund. As part of the federal funding agreement, Maple Leaf will invest a further $5 million over the next five years on projects that accelerate adoption of advanced manufacturing and production technologies and support the company's goal to reduce its environmental footprint by 50% by 2025.
This strategic investment will deliver a solid return on capital and create significant shareholder value.
The project is expected to deliver annualized benefits of $105 million to the company's Adjusted EBITDA on a run-rate basis within 12 months of completing start-up, and by the end of 2023. Based on current sales, adjusted for recent acquisitions, we estimate this will contribute over 270 basis points to the current Adjusted EBITDA margin.
The project is expected to be accretive to earnings beginning in 2022 and contribute to the company achieving its Adjusted EBITDA margin target of 14% - 16%. ■