Oetker Canada to Shut NB Pizza Plant, Hike Ontario Output
Dr. Oetker has announced that it will end frozen pizza production at a leased plant in Grand Falls, NB, Canada, by the end of May 2018. Closure of the facility will result in employment termination for approximately 180 people.
The company’s decision to shutter the factory “came as a surprise to everyone," said Mayor Marcel Deschênes. "In a small community, the loss of 180 jobs is really a blow."
A statement issued by Dr. Oetker Canada Ltd. says that displaced employees will be offered severance packages that exceed statutory requirements. Additionally, they will be provided with counseling, resume support and career planning assistance. The company will continue group medical and dental benefits until December 31, 2018.
It will also establish a $4 million Grand Falls Community Fund to assist with job retraining and economic development, working with all levels of government, including the mayor.
"We care deeply about the people on our Grand Falls team and we will sit down individually with them to discuss their own specific path forward," said Executive Vice President Cécile Van Zandijcke. "That will be our immediate focus now."
The retail food climate in which Dr. Oetker operates has become increasingly challenging in recent years both in terms of price and cost, adding significant additional pressures in the manufacturing environment, according to a statement released by the company.
"This very difficult announcement does not reflect on the quality of work and dedication of our Grand Falls employees. There is nothing our Grand Falls employees could have done differently. Food manufacturers have been facing severe economic pressures over the last few years and today's market has become ultra-competitive. In order for Dr. Oetker to continue operating efficiently within this challenging environment, we needed to restructure our Canadian manufacturing operation," said Van Zandijcke.
The planned restructuring will see Dr. Oetker’s recently expanded plant in southwestern Ontario likely boost frozen pizza output to more than 40 million units per year and hire up to 100 additional workers to get the job done. The company confirmed that an estimated 70% of the production in New Brunswick will be shifted to the facility in London, Ontario, while its factory in Lodi, New Jersey, USA will handle the other 30%.
“This is a big gain for London,” stated Sylvain Charlebois, a food distribution policy professor at Dalhousie University in Halifax, Nova Scotia. “It makes sense from a business perspective. You have a modern plant in London with excess capacity, access to a lot of ingredients, and you want to be in southern Ontario where a lot of different ingredients are grown.”
About Dr. Oetker
Established in Germany in 1891 as a producer of cake mixes and other baking ingredients, Bielefeld, North Rhine-Westphalia-headquartered Dr. Oetker has been operating in Canada for the past 58 years and is recognized as one of the fastest growing food companies in the country. The diversified food producer’s worldwide sales topped $3 billion in 2016.
Dr. Oetker took over the Grand Falls factory in northwestern New Brunswick from McCain Foods in 2014. The family-owned and managed company sells more than 40 varieties of frozen pizza currently produced at three plants in the Canada under the Ristorante, Casa de Mama, Guiseppe and Panebello labels. In 2016 consumers voted Dr. Oetker as the most trusted frozen pizza brand in the BrandSpark Canadian Shopper Survey. In addition, its Casa Di Mama Bacon offering was designated Best New Product of the Year.