The well-known ice cream maker said Wednesday the plant will close in October and ice cream production for Canadian Baskin-Robbins shops will shift to Scotsburn Dairy of Truro, Nova Scotia, which already produces its ice cream products.
"We deeply regret the need to close the Peterborough plant, but the facility, which is already operating around the clock, is unable to keep up with the demands of our rapidly growing international business," said Peter Laport, vice president of global strategic manufacturing and supply at Baskin-Robbins.
"We have explored other options, but modernizing the facility and adding capacity are unfortunately not viable."
The ice cream chain has 113 franchised shops in Canada with about 550 full-time and part-time employees.
The company says the closure of the Peterborough plant — its last remaining manufacturing plant in North America — is in line with its strategy to move completely to third-party companies to manufacture its ice cream.
"We believe it makes sense to focus on our core skills of franchising, retail and product innovation, rather than ice cream production," Laport said.
Percy Paris, Nova Scotia's minister of economic and rural development, said the decision will lead to more employment in the Truro area and lower operating costs at the plant.
"Nova Scotia has a competitive advantage, and is an ideal location for national and international companies to do business," Paris said in a statement issued Wednesday.
"Baskin-Robbins' decision drives that home," said Mr. Paris.
The Peterborough plant currently makes ice cream for about a third of the 4,200 Baskin-Robbins shops outside the U.S. Ice cream produced there for locations outside of Canada will shift to Dean Foods.
All plant employees will be offered severance compensation and benefits, such as counselling and career planning help.
The company expects to incur one-time charges of about US$16 million to $18 million to close the plant. Beginning next year, it expects annual savings of $4 million to $5 million.
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