Saputo to shut two dairy plants in East

Canadian dairy processing giant Saputo, in a move it describes as “right-sizing” its manufacturing footprint, plans to close two of its plants in Eastern Canada within a year.

Montreal-based Saputo said Thursday it will close the former Riverside Cheese and Butter plant at Trenton, Ont. this September and its Baxter dairy plant at Saint John, N.B. in January next year.

Production at both sites “will be integrated into other Saputo facilities across Canada.”

Announcing the move in its third-quarter results, Saputo said the decision is “aimed at improving its operational efficiency and right-sizing both its manufacturing footprint and sales force in Canada” and is part of its “continual analysis of its overall activities.”

The decision affects about 280 employees in all, some of whom Saputo said would be offered transfers to other plants in its Canadian dairy division, while others will get severance and “outplacement support.”

The Trenton plant came to Saputo when the company bought Trenton-based Italian specialty cheesemaker Riverside Cheese and Butter for $7 million in 1998.

The Saint John operation was absorbed into Saputo in 2001 when the company bought Dairyworld Foods, which had bought local firm Baxter Dairies in 1998. The Baxter brand in Saint John dates back to 1924.

Saputo on Thursday booked net earnings of $197.8 million on $3.891 billion in revenues for the quarter ending Dec. 31, down from $342 million on $3.577 billion in the year-earlier period.

Of its Canadian business, the company said a “competitive Canadian landscape continues to exercise downward pressure on financial performance,” but “market conditions continue to show signs of easing,” offering “an improved outlook for capturing profitable sales volumes.”

Looking ahead, Saputo said Thursday it “will also continue to focus on increasing its operational efficiency” in its Canadian dairy arm through cost-cutting as well as “strategic investments to mitigate low growth and consistently high warehousing, logistics and transportation costs.” — Glacier FarmMedia Network