Tuesday, March 29, 2016

Saputo to close 3 plants in Canada

Saputo Inc. announced it will close three of its plants in Quebec, Ontario and Atlantic Canada. In all, 230 workers will lose their jobs by the end of next year. The closings are designed to cut costs and improve efficiency of the company.

The shares of Saputo SAP rose one percent on the Toronto Stock exchange on the news. Saputo is based in Montreal Quebec. A plant in Sydney Nova Scotia will close this June after being purchased in 2014. In August, another plant in Princeville, Quebec, will close — it was bought in 2015 and makes goat cheese. The last plant in Ottawa, with 126 employees, will close in December of next year. The Ottawa plant was just purchased from Nielsen in 2008. Production will be diverted to other Saputo plants. The company hopes to save about $9 million annually from the move by 2019. Over the next two years, Saputo plans to invest $32 million in other locations. The company expects it will cost $23 million to close the plants, including a $19 million writedown of fixed assets.
Saputo was founded as a cheese making company in 1954 by an Italian Immigrant Giuseppe Saputo. As well as cheese the business includes other dairy products. It is the 10th largest dairy processor in the work. It expanded from its base in Quebec throughout Canada, in the U.S., Argentina, and Australia through mergers and acquisitions. Saputo is the largest cheese maker in Canada. It operates 25 dairy operations across Canada. As well as the Saputo brand the company also uses Armstrong, Dairyland, Black Creek and several other brand names. The company closed plants in Alberta and the U.S. two years ago.
Spokesperson for Saputo, Sandy Vassiadis, claimed the closures were part of the company strategy to improve efficiency by transferring production to facilities that were not fully used, have more modern equipment, or can be easily expanded. In an interview, she said:"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." Saputo is able to close the plants even though Canada has regulations that require milk to stay in the province it is produced. Saputo has other plants in each of the three provinces. Saputo operates 54 plants around the world including 24 in Canada. It employs about 12,000 workers.

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