Saputo to shut two Alta. powdered milk plants

Two plants producing powdered and condensed milk in Alberta are set to close by the end of next year as Montreal dairy giant Saputo folds their operations into other facilities.

Saputo announced Wednesday it will close its plants at Wetaskiwin, about 60 km south of Edmonton, and at Glenwood, about 80 km southwest of Lethbridge.

The Wetaskiwin plant, which Saputo took over in 2001 when it bought Dairyworld Foods, made condensed milk and evaporated milk. The Glenwood facility, a former cheese plant which Saputo bought in 2000, stopped making cheese in 2004 and switched to processing powdered milk. [Related story]

Saputo at the same time announced it will shut two of its U.S. cheese plants: a Swiss cheese facility at New London, Wisconsin, about 60 km west of Green Bay, and a mozzarella and provolone plant at Hancock, Maryland, about 160 km west of Baltimore.

Saputo took over the Hancock plant when it bought the operations of Jefferson Cheese in 1988, and bought the New London plant from Avonmore Waterford (now Glanbia) in 1998.

The first of the four closures is scheduled to take place in May this year, while the last will be in December 2015, Saputo said in a release, not specifying which plants would close first or last.

The four closures are expected to impact about 180 Saputo employees, some of whom will be “offered the possibility” of transferring to other plants. All four plants’ current production is to be “integrated into other Saputo facilities.”

Saputo said it now plans to invest about $35 million in “new fixed assets” at other unspecified Saputo plants, while avoiding a like amount in capital costs that would have been needed to upgrade the four plants being shuttered.

The company said it expects to book about $19.8 million in costs related to the closures after taxes in its fourth quarter of 2014, and savings of about $4.8 million per year afterward starting in fiscal 2015.

The closures, Saputo said, stem from its “efforts to pursue additional efficiencies and decrease costs while strengthening its market presence.” — Network

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