UPDATE 1-Maple Leaf to close Western Canada meat plant

Tue Feb 1, 2011 5:07pm EST

* Production to wind down starting May

* Closure costs seen at C$12.1 mln

WINNIPEG, Manitoba Feb 1 (Reuters) - Maple Leaf Foods (MFI.TO) said on Tuesday that it will close its prepared meats plant in Surrey, British Columbia, as the Canadian company carries out a plan to close some facilities and modernize others to better compete with U.S. rivals.

The Surrey plant, which produces ham, sliced meats, sausage and deli products, will gradually wind down operations starting in May and close at the end of September.

Maple Leaf said it will consolidate production at its plants in Saskatchewan, Manitoba and Ontario after making modest upgrades.

The closure will affect 165 employees who will receive severance, Maple Leaf said.

Closure costs, including severance, decommissioning and asset writedowns, will amount to about C$12.1 million ($12.2 million) before tax, the company said.

($1=$0.99 Canadian) (Reporting by Rod Nickel; editing by Rob Wilson)

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