Saputo will close three of its facilities in Eastern Canada by the end of 2017, a measure that will affect a total of 230 employes in order to improve its “operational efficiency”.
The largest dairy processor in the country and close its plant in Princeville, Quebec, that of Sydney, Nova Scotia and the Ottawa, Ontario, and will integrate their products with those of other company facilities.
The Sydney plant will close in June, one of Princeville in August, and the Ottawa almost a year and a half later, in December 2017.
Sydney’s activities were acquired by Saputo in 2014 as part of the redemption of the dairy activities of Scotsburn Co-Operative Services. The installation of Princeville, specializing in goat cheese, was acquired by Saputo last fall as part of the acquisition of Woolwich Dairy.
For its part, the Ottawa facility was included in the acquisition of Nielsen Dairy from Weston Foods for $ 465 million in 2008.
According to the spokesman of Saputo, Sandy Vassiadis, closures are part of the framework of constant efforts of the company to improve efficiency by moving some production in facilities that are not fully utilized, which of art equipment or can be enlarged.
“We compare the facilities that make similar products and these (…) could not increase the rate to reach efficiency levels of other facilities that manufacture similar products,” she explained during ‘a meeting.
termination indemnities and services to facilitate the career transition will be offered to the affected employees and some of them could be transferred to other company facilities, said Saputo.
The costs associated with closures are expected to be approximately $ 23 million after tax and will be recorded in the fourth quarter results of 2016. Saputo calculates that the rationalization measures are expected to result in annual savings from 2017, which should gradually grow to approximately $ 7 million in fiscal 2019.
Saputo said it intends to add approximately $ 32 million in its capital expenditure plan for the next two years. These investments will be used for other of its facilities, but the company did not give more details about it.
Saputo is the largest cheese producer in Canada and one of the 10 largest dairy processors in the world. It currently has 54 plants worldwide, including 24 in Canada, employing about 12,000 workers.