Peterborough, Ont.—Ice cream shop Baskin-Robbins plans to close its Peterborough, Ont., manufacturing plant this fall, citing demands of “rapidly growing international business.”
The long-standing plant, located approximately 130-kilometres northeast of Toronto, is operating around the clock, according to Baskin-Robbins vice-president of global strategic manufacturing and supply Peter Laport, and can no longer keep up with the company’s growth.
“We have explored other options, but modernizing the facility and adding capacity are unfortunately not viable,” Laport said in a statement.
Another significant factor in the decision to close the plant is Baskin-Robbins’ strategy to transition entirely to third-party companies to manufacture its ice cream, it was announced.
“Peterborough is the only remaining manufacturing facility we operate in North America,” Laport said. “We believe it makes sense to focus on our core skills of franchising, retail and product innovation rather than ice cream production.”
The facility currently employs 80 people, according to the company, 46 of whom are represented by the Canadian Auto Workers’ (CAW) union.
Approximately 15 employees will be laid-off by the end of July, according to Baskin-Robbins, with the remaining positions phased out as production slows.
Baskin-Robbins announced a few managers will stay on until the end of the year.
All employees at the plant will be offered severance pay, as well as counseling and resume support and career planning assistance.
The Company expects to incur one-time charges in 2012 of approximately $16- to $18-million, including a $4-million non-cash charge associated with the closing of the plant.
Beginning in 2013, the Company currently expects annual savings of approximately $4- to $5-million as a result of transferring production to third-party manufacturers.
The Peterborough plant produces ice cream for approximately one-third of Baskin-Robbins’ more than 4,200 shops outside the United States.
Production will shift to existing partner suppliers, the company announced, with ice cream for Baskin-Robbins shops located in Canada made at Scotsburn Dairy of Truro, N.S.
That dairy already produces Baskin-Robbins ice cream products.
Ice cream that had been produced in Peterborough for shops other than those in Canada will shift to Dean Foods, according to Baskin-Robbins.
The Peterborough facility is expected to close in October.