Canada's largest dairy processor closes plant, moves production

Thursday, March 14, 2013

by SUSAN MANN

Canada’s largest dairy processor, Saputo Inc., is closing a cheese manufacturing plant in Warwick, Quebec by next June to improve the efficiency of its operations.

The production from that facility is being moved to other Quebec plants. Some of the plant’s 100 employees could possibly transfer to another Saputo dairy plant, the company says in a March 14 press release.

Saputo had previously announced the closure of a plant in Winkler, Manitoba by January 2014. That closure affects 40 people. Severance and outplacement support will be available for employees affected by the closures, the release says.

As it closes the two Canadian plants, Saputo plans to spend $36 million on new fixed assets at other facilities. The company didn’t specify what assets it was buying and what facilities would be getting them. The closures and new asset expenditures will costs the company about $7 million after taxes, including the after tax fixed asset write down of about $4 million.

The costs will be recorded in the fourth quarter of the company’s fiscal year. After taxes, the savings should be about $6 million a year starting at the beginning of the 2015 fiscal year.

Saputo manufactures, markets and distributes cheese, fluid milk, yogurt, dairy ingredients and snack cakes. Its products are sold in more than 50 countries.

Sandy Vassiadis, corporate communications director, couldn’t be reached for comment. BF