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Lower dollar could give Maple Leaf Foods a leg up on U.S. competitors

Major restructuring plan will leave Maple Leaf with 13 plants instead of 22

Executives at Maple Leaf Foods are optimistic about the benefits a weaker Canadian dollar could have on its meats business. Chief operating officer Guy McSimmons told analysts on a conference call Friday that a weaker loonie is a "good thing over time'' for the Toronto-based company because of currency exchange rates. Maple Leaf Foods supplies private label and prepared meat products to some American customers and benefits when it converts the U.S. currency back into Canadian dollars. In turn, U.S. companies who supply meats in Canada would face the opposite effect when they convert Canadian currency into the U.S. dollar. "It also makes it much more difficult for U.S. competitors here,'' he said, though he added that the impacts would be more evident over several quarters. Late Thursday, Maple Leaf Foods Inc. reported a narrower second-quarter loss of $7.5 million as restructuring costs for its business were reduced by 64 per cent. Total sales from its meat products and livestock businesses slipped 1.3 per cent to $820.8 million from $831.8 million. Shares of the company dropped four per cent, or 99 cents, to $22.70 on the Toronto Stock Exchange in afternoon trading. Maple Leaf is winding down a major restructuring plan that was designed to lower costs by combining some of its plants and closing others. Once its restructuring plan is finished, it will operate 13 meat plants instead of 22 and two distribution centres instead of 19. Chief executive Michael McCain was absent from the quarterly conference call for what a representative for the company said was an unexpected personal matter.

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