Iconic breakfast cereal maker Kellogg plans to permanently close its London, Ont. ready-to-eat (RTE) cereal plant by the end of next year, putting about 500 people out of work.
The plant produces over 30 Kellogg cereal brands sold across Canada, including All-Bran, Corn Flakes, Special K, Frosted Flakes, Rice Krispies, Mini-Wheats, Froot Loops, Krave and Vector, and exports about a third of its output to the U.S.
Kellogg has operated at London since 1924, when it took over the former Canada Corn Co. plant that had held the rights to make Corn Flakes for the Canadian market.
The 106,000-square metre plant, following a major expansion in the mid-1980s, now makes about 750,000 cartons of cereal daily for the Canadian market, according to the Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) Local 154-G, which represents plant staff.
The plant, which according to regional media today has about 500 staff, is one of the “most technologically advanced cereal manufacturing facilities” within Kellogg, using computerized automation across all steps of production from mixing grains to packing cartons, the union said.
The closure was described Tuesday as part of Kellogg’s “Project K,” a four-year “efficiency and effectiveness” program which it said will “unlock cost savings that Kellogg will invest in its strategy and grow its business.
Under the program, announced last month, Kellogg said it is “strengthening its existing business in core markets, increasing growth in developing and emerging markets and driving increased value-added innovation.”
The company has “a compelling business need to better align our assets with marketplace trends and customer requirements,” CEO John Bryant said in a release Tuesday, in which he also announced closure by late 2014 for the company’s Australian snacks plant at Charmhaven, about 100 km north of Sydney.
“To that end, we are taking action to ensure our manufacturing network is operating the right number of plants and production lines — in the right locations — to better meet current and future production needs and the evolving needs of our customers.”
Bryant on Tuesday also announced a major expansion for Kellogg’s cereal and snacks plant at Rayong on the Gulf of Thailand, about 160 km southeast of Bangkok. That expansion is expected to be “fully operational” by early 2015.
“As with any project of this scope and one that impacts people, these are difficult decisions,” Bryant said of the closures. “As our employees and others would expect from Kellogg, we will help those who are impacted through their transitions.” — AGCanada.com Network
Kellogg to cut seven per cent of workforce by 2017, Nov. 4, 2013
Kellogg to expand central Ont. cereals plant, April 1, 2011
Kellogg moves to raise cereal fibre content, June 9, 2009