Canadian dairy heavyweight Saputo is investing AUD20m (US$14m) to shift cream cheese production in Australia from its Maffra site, which has been shuttered.
Saputo announced its intention in November to close down the Maffra facility in Victoria. Those cream cheese operations will now move to its Smithton plant in Tasmania, with expansion work underway.
A spokesperson for Saputo in Australia told Just Food the investment is a “great example of how it is investing in products that give a high rate of return for every litre of milk”.
Frozen, natural cream cheese production is expected to begin at the Smithton plant in Australia’s spring season, “in time for peak milk production”, the spokesperson said. The Tasmanian spring runs from September through November.
The Australian Broadcasting Corporation (ABC) was among the Australian media outlets to initially break the investment news, coinciding with a tour of the company’s local plants by Saputo’s president and CEO Lino Saputo, Jr.
Mr. Saputo told ABC: “The dairy pool has been declining over the course of the past three years. In fact, it’s been declining since my first trip out here in 2001. Then the country was producing about 11 billion litres of milk.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“When we acquired Warrnambool Cheese and Butter I believe that number was about 9.5 billion and now we’re around 8.5 billion. So the milk pool is shrinking and it’s important for us to right-size our network, and unfortunately the Maffra closure is one of the casualties.”
Saputo bought up the remaining shares in Warrnambool Cheese and Butter Factory in 2017.
About 80 jobs have been lost at the Maffra site, ABC reported.
Saputo is still “committed” to Australia, the CEO told the news service. “We’re committed for the long term,” he said, adding: “We have incredible products and incredible people manufacturing them, so for us to abandon this market would be foolish.”
Speaking at a Scotiabank event in September, Mr. Saputo had alluded to potential plant closures in Australia and the US, and to a lesser degree in Canada and the UK.
Under what Saputo terms as “consolidation initiatives”, the company said the steps being taken Down Under are “intended to enhance its operational efficiency and strengthen its competitiveness in Australia”. The Canadian business supplies dairy products such as Devondale and Cracker Barrel in Australia.
Over in the US, Saputo revealed a plan earlier this month to build a cheese facility in Franklin, Wisconsin. However, two others would be closed, in South Dakota and the Green Bay site, also in Wisconsin.