Canada Bread Company Ltd. (TSX:CBY) plans to close three Toronto-area bakeries and move their production to a new plant somewhere in southwestern Ontario by 2013 under a $125-million revitalization plan announced Tuesday.

The site for the new bakery - which Canada Bread says would be the largest in the country - hasn't been chosen but the company expects to make a final decision on the location by the end of March.

"It will drive significantly improved efficiencies in our manufacturing and supply chain, providing the capacity to support organic growth and the growing needs of our customers," Canada Bread president and CEO Richard Lan said Tuesday.

Canada Bread said it expects to begin construction on the new bakery within six months of securing a location and have the first production lines commissioned about a year after that.

The cost includes a $100-million capital investment on land, as well as building and equipment. The company will take a separate $25 million restructuring charge for decommissioning production and employee severance payments.

The Toronto-based company says employees of the three aging bakeries will have an opportunity to apply for the 300 positions at the new bakery or elsewhere at Canada Bread.

The company, a publicly traded subsidiary of Maple Leaf Foods Inc. (TSX:MFI), has a total of about 8,500 employees in North America and the United Kingdom.

The closure of a Toronto-area bakery is expected in late 2011, the second will be in 2012 and the third in 2013.

© The Canadian Press, 2010

AUTHOR: The Candian Press

January 12th, 2010

SOURCE: CBC