Canada-Pork processing plant for sale.

CANADA-MAPLE LEAF FOODS AWAITING MARKET RECOVERY TO SELL BURLINGTON HOG PLANT:

Maple Leaf Foods announced that despite active negotiations with several prospective purchasers, current economic conditions and credit markets have made it difficult to complete a satisfactory sale of its Ontario pork processing business located in Burlington, Ontario. As a result, the Company does not plan to continue a formal sale process until markets rebound, which will likely not be before early 2010. "The current economic conditions and credit markets have created a less than ideal environment to sell any business," said Michael Vels, Chief Financial Officer of Maple Leaf Foods. "There is no immediate urgency to selling the Burlington business. It is an efficient and profitable business and we want to ensure we negotiate an offer that recognizes the appropriate value for the business and meets the expectations of our shareholders." COMMENT: Maple Leaf announced its intention to sell the large hog processing plant last summer as part of the company’s intent to re-focus its operations towards prepared meats, meals and bakery, involving divestiture or exit of several of its primary processing and agriculturally oriented businesses. According to Maple Leaf, the Burlington facility has a processing capacity of up to 50,000 hogs per week, but current weekly runs are less. The plant is located in close proximity to major domestic and U.S. markets, transportation routes and a skilled labor pool, and is licensed to export its pork products to nearly 50 countries worldwide. At the time of the original announcement to sell the Burlington plant, there was speculation whether a U.S. pork processor might be interested. Smithfield’s Foods, the U.S. and the world’s largest pork processor, had a brief foray in the Canadian pork industry but sold its Canadian pork business (formerly Schneider) to Maple Leaf Foods about five years ago.