Near-north Ontario, French River | I think there are a lot of reasons Heinz closed here. Among them.. high wage rates, currency exchange rates, and a relatively short season utilization of the facilities. Ultimately I think it was the exchange rates that put the nail in the coffin as the local plant was built to compete at a 70-80cent dollar. At 70 cent exchange rate the higher local labour rates ( and all the associated benefits packages ), and higher overhead were blunted, but when the Canadian dollar went to 90 cents.. and finally par the writing was on the wall. That high labour rate went directly to the bottom line, along with the price paid for the paste ( again built around a low dollar relative to the competition) ,... knock 25-40% off your bottom line entirely based on exchange rate and it gets ugly in a hurry. Capacity wise, in tons/hr, I believe our local plant was one of Heinz's most efficient plants but when the plant runs only 6-7 weeks a year the overhead kills the ton/hr efficiency . Compare that to plants on the west coast of the US, and even central America that might run for months on end, or even year around . I was once told by the owner of a small cannery, that would co-pack for Heinz and others, that they could import canned tomatoes into Canada for LESS money than it cost them to buy the tomatoes here... no need to process product, deal with labour, warehouse, etc all they had to do was slap a label on the imports and ship them off to the store. All for less than the cost of the raw product here. |
Tomato growing
