Saputo cutting costs by closing three Canadian plants that employ 230 workers

Saputo says it will close three plants in Eastern Canada that employ some 230 workers in a move to cut costs and boost efficiency.

MONTREAL — Saputo says it will close three plants in Eastern Canada that employ some 230 workers in a move to cut costs and boost efficiency.

The Montreal-based dairy processor and cheese maker said its plant in Sydney, N.S., will close in June, followed by another in Princeville, Que., in August. A third facility in Ottawa will close in December 2017.

The Sydney operations were acquired in 2014 as part of the purchase of the fluid milk activities of Scotsburn Co-Operative Services.

Saputo bought the Quebec plant, which makes goat cheese, in 2005 as part of a deal for Woolwich Dairy.

The Ottawa facility was part of the $465-million acquisition in 2008 of Nielsen Dairy from Weston Foods.

Saputo spokeswoman Sandy Vassiadis said the closures are part of the company’s constant drive to improve efficiency by moving production to facilities that aren’t fully used, have more modern equipment or can be expanded.

“We compare the facilities that do similar products and these ones…couldn’t raise the bar to attain efficiency levels like the other plants that do similar products,” she said in an interview.

Saputo is able to close these plants because it has other operations in the affected provinces that allow it to fulfil Canadian regulations that require milk to remain in its province of origin.

The move announced Tuesday is expected to save $9 million annually by fiscal 2019.

Meanwhile, Saputo (TSX:SAP) plans to invest about $32 million in other locations over the next two years.

Saputo is the largest cheese manufacturer in Canada and one of the top 10 dairy processors in the world. It currently operates 54 plants around the world, including 24 in Canada, that employ about 12,000 workers.

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