Leamington tomato processor to close

Thursday, November 14, 2013

by SUSAN MANN

The country’s largest food processing facility owned by H.J. Heinz Company of Canada LP and located in Leamington is closing leaving 46 contract tomato growers in southwestern Ontario without a market for their product.

“The industry has been carved in half,” says Walter Brown, director on the Ontario Processing Vegetable Growers board. He has been a contract grower for Heinz for 47 years and he took over the contract from his father. Brown grew 180 acres of tomatoes this year.

“This is devastating,” he says, noting they were hoping the plant would remain open even if it stopped taking raw tomatoes to make paste for ketchup. “All other Heinz plants buy paste from California to make their ketchup.”

Brown says he’s left without a choice and will have to grow more grains now that Heinz is closing. There isn’t another plant in Ontario that can take the amount of tomatoes Heinz’s growers were producing.

American entrepreneur Warren Buffet’s Berkshire Hathaway and 3G Capital, made up of Brazilian investors, bought Heinz this year.

Brown says they were told by a very reliable source Wednesday that the plant is closing. The company was to tell employees at a meeting this afternoon. The company was to issue a news release, he says and until “there is a news release that spells out exactly what they’re doing nothing is sure.”

In a typical year, Heinz contracts to buy about 230,000 tons of tomatoes but this growing season “was the worst growing year ever,” he notes. “As far as delivering the percentage of contracted tomatoes, it was the worst ever.”

The tomatoes are used to make ketchup and juice.

The announcement of the closure isn’t totally unexpected, Brown says. The Leamington plant was the only one of Heinz’s facilities in the world that converted raw tomatoes into paste and that “kept us thinking when would the shoe drop.” Heinz has closed other facilities around the world that used raw tomatoes to make paste.

The Leamington plant is the second largest Heinz plant in the world and has been operating for 104 years. It employs 750 unionized workers, 150 salaried staff and 340 to 360 seasonal staff. It mainly supplies the Canadian market but also ships some products to the United States.

From 2008 to 2012, an average of 13,377 acres of tomatoes were grown for processing with an average farm gate value of $54.5 million.

Brown says growers in Essex and Kent produce more than 500,000 tons of tomatoes for processing annually and Heinz has taken almost half of the production. “When you’re cutting the production almost in half, it’s gigantic. It guts the industry big time.”

Joan Patterson, Heinz corporate affairs leader, couldn’t be reached for comment. BF