Heinz deal to save hundreds of jobs at Leamington plant

An announcement regarding the future of the Heinz plant in Leamington, Ont., will be made Thursday morning, CBC News has confirmed.

Leamington, Ont., plant had been set to close in June

In November of last year, Heinz announced it would close its Leamington, Ont., processing plant in June 2014. A deal to save some jobs is to be announced Thursday. (CBC News)

An announcement regarding the future of the Heinz plant in Leamington, Ont., will be made between 9 a.m. and 9:30 a.m. Thursday, CBC News has confirmed.

Leamington Mayor John Paterson said he has few details, but the deal involves Heinz and a company that he and others have been courting to maintain some food processing jobs at the 105-year-old plant.

The move will save up to 40 per cent of the nearly 800 jobs that were to be lost in June when Heinz ceases operations there.

Paterson said the province has been heavily involved in solidifying the deal.

The mayor cut short his attendance at the Good Roads Association conference in Toronto so he can be in town for the announcement.

"I'd just ask everybody to be patient on the Heinz issue," Paterson said. "I'm just as hungry as anybody else for some good news."

Chatham-Kent-Essex member of the legislature Rick Nichols said "good news for Leamington" will be announced Thursday.

"But in terms of details, the name of the company and number of jobs, everything is under lock and key," Nichols said. "Everyone, including Heinz, is tight-lipped about this."

Sources close to the negotiations tell CBC News a Canadian food processor will continue to make tomato juice for Heinz. The company will then sell the juice in the Canadian market.

Locally grown tomatoes will be used to make the juice.

The Leamington plant was the last in the Heinz chain to process whole tomatoes. Tomato paste made in the U.S. is used at all its other U.S. plants. If Heinz wants to maintain a share of the Canadian tomato juice market, it cannot simply add a packaging line and make tomato juice from concentrate (paste) in the U.S. and ship it to the Canadian market. 

According to the Canadian Agricultural Products Act, tomato juice sold in Canada must be made from whole tomatoes.

Patterson said that whoever takes over the processing needs to get up and running quickly.

"If it's going to be a success this year, I think it needs to happen pretty soon. Tomato farmers have to get underway right away. So I think if anybody is going to be successful … it has to be announced soon," Paterson said.

Tomato farmer George Stankos welcomed the prospect of good news.

"It's nice for Leamington, all the workers and all the growers. There's 800-some people who aren't going to have jobs. And the growers, we have all this equipment that's idle," he said.

Forty-three local tomato growers supplied Heinz with 200,000 tonnes of tomatoes every year.

Stankos said his farm needs to produce at least 80 acres of tomatoes to be worth it.

Warren Buffett's Berkshire Hathaway and partner 3G Capital bought H.J. Heinz Co. for $23.3 billion US in February 2013.

In November of last year, Heinz announced it would close its Leamington processing plant in June 2014.

At the time, Buffet called the facility “unprofitable.”

The Heinz plant in Leamington made ketchup, beans, baby food and juice.

An email to Heinz spokesman Michael Mullen wasn't immediately returned.