Saputo closing four plants

MONTREAL — Cheesemaker Saputo is eagerly pursuing growth opportunities around the world while again downsizing North American operations by closing four plants — two in Alberta and two in the United States — and shifting production elsewhere in its operations.

MONTREAL — Cheesemaker Saputo is eagerly pursuing growth opportunities around the world while again downsizing North American operations by closing four plants — two in Alberta and two in the United States — and shifting production elsewhere in its operations.

The company said about 180 employees will be affected by the latest closures.

The Alberta plants are in Wetaskiwin and Glenwood, with the American locations at New London, Wisc., and Hancock, Md. The shutdowns will begin in May and be completed by December 2015.

“Over the recent years, Saputo has maintained efforts to pursue additional efficiencies and decrease costs while strengthening its market presence,” the company said in a news release.

“The announced measures are part of the company’s continual analysis of its overall activities.”

Saputo said workers will be given severance and outplacement support and some will be offered the possibility of transferring to other Saputo locations.

Saputo said costs connected with the closures will total about $19.8 million after taxes.

The moves are expected to save about $4.8 million a year.

The company also said it expects to spend $35 million on new fixed assets in other Saputo plants in connection with the decision, but save the same amount in upgrades that would have been required at the facilities to be closed.

It described the plants being shut as older, inefficient plants that could not be easily upgraded.

Last month, Saputo received approval from Red Deer’s municipal planning commission for a major addition to its dairy processing plant at 5410 50th Ave. The project will include a new nine-metre-high building with a 23-metre tower, woth both to be constructed to look like a commercial building.

The closures announced on Wednesday mark the second year in a row that Saputo has announced a spring downsizing of its Canadian operations.

Last March, its announced plans to close a manufacturing facility as of June 2014 in Warwick, Que., affecting 100 workers. That followed its decision several months earlier to close a facility in Winkler, Man., that was part of its $407-million acquisition of Dairyworld Foods in 2001.

Chief executive Lino Saputo Jr. didn’t mention the plant closures during a presentation Wednesday to a CIBC retail and consumer conference where he described the company’s Canadian operations as “very stable” despite the high cost of milk, generating about 12 per cent EBIT margins.

“Our platform is very good, very solid, generating very good cash flows for us but it’s not a growth platform and it’s not a platform where we can export from,” he said from Toronto.

“Very happy with it but really our growth is coming from outside of Canada.”

He pointed to the United States, where Saputo is the third-largest cheese manufacturer and where its sees great acquisition opportunities in a fragmented market. He also noted that 17 per cent of total production is exported, up from three per cent a decade ago.

Saputo also said the Montreal-based company is considering a number of acquisitions in Brazil, Australia and New Zealand.

With global dairy demand growing by four to five per cent a year, but production increasing by just one to two per cent, he said he’s very bullish about the impact on pricing and opportunities for dairy farmers to further boost production.

Saputo is one of the top 10 dairy processors in the world, generating about $9.3 billion of annual sales and employing 13,000 people.

Just Posted

Firefighters to visit Oriole Park homes near industrial fire to answer questions

About 80 homes were evacuated on Wednesday because of nearby fire

Trump Russia probe finally delivers some answers

WASHINGTON — After nearly two years of waiting, America is getting some… Continue reading

Trans Mountain Pipeline deadline extended

OTTAWA — The federal government is delaying a decision on the Trans… Continue reading

Kenney talks pipelines with Trudeau after election win, calls it cordial

EDMONTON — Jason Kenney, Alberta’s incoming premier, said he cordially talked pipelines… Continue reading

Shooting victims in Penticton, B.C., remembered before vigil at city park

PENTICTON, B.C. — Family and friends are remembering neighbours who were gunned… Continue reading

Updated: Industrial fabrication shop in Red Deer destroyed in morning fire

About 30 workers got out safely before building in north end gutted

Earth, meet Polo: Ralph Lauren unveils plastic bottle shirt

NEW YORK — Earth, meet Polo. Polo Ralph Lauren on Thursday launched… Continue reading

Statistics Canada reports retail sales rose 0.8 per cent in February

OTTAWA — Statistics Canada says retail sales rose 0.8 per cent in… Continue reading

Inflation rises 1.9% on higher prices for fresh vegetables, mortgage costs

OTTAWA — Canada’s annual inflation was up last month as price pressures… Continue reading

Netflix adds 9.6M subscribers in 1Q as competition heats up

SAN FRANCISCO — Netflix kicked off the year with the biggest subscriber… Continue reading

Liberals find anti-Trudeau sentiment on campaign trail in Prince Edward Island

OTTAWA — When voters in Prince Edward Island go to the polls… Continue reading

Officer tells of finding body at trial for B.C. dad accused of killing daughters

VANCOUVER — A police officer choked up Tuesday as he recalled finding… Continue reading

Man faces murder charges in slayings of two men, two women in Penticton, B.C.

PENTICTON, B.C. — A former city employee described as a hard-working, civic-minded… Continue reading

A look at Alberta’s elections since the province was created in 1905

EDMONTON — A chronology of Alberta elections: Nov. 9, 1905: Lawyer Alexander… Continue reading

Most Read