Canadian dairy major Saputo is building a US cut-and-wrap cheese facility while closing three as it attempts to “streamline” operations.
The company is also expanding its string-cheese operations on the West Coast, it announced yesterday (2 February).
Montreal-headquartered Saputo is investing CAD240 (US$179.9m) in a Franklin, Wisconsin facility, which is under construction and will create around 600 jobs. The site is set to open in 2025.
It plans to transfer packaging operations from other sites to Franklin once it is fully operational, meaning its plant in South Dakota is set for closure in the third fiscal quarter of next year and its Green Bay, Wisconsin, facility is set to close in 2025.
Saputo also announced a CAD75m investment to convert its cut-and-wrap facility in Tulare, California, into a string-cheese site. It will then close its string-cheese site in South Gate, California, in 2025, and move operations to Tulare.
The closure of the three facilities will result in job losses for approximately 720 employees, Saputo told Just Food. Employees will be given the option to relocate to another Saputo facility or take severance pay.
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It follows several strategic switch-ups in the company’s cheese production last year, as it shuttered one goat’s cheese manufacturing facility in Wisconsin and invested CAD45m to convert a nearby mozzarella plant to goat cheese. Saputo said the moves were intended to “further streamline its manufacturing footprint in its US”.
CEO Lino Saputo said: “Continuing to lay the groundwork for future growth in the USA, these initiatives aim to solidify our ability to meet current and future customer demand and further improve our cost structure.
“Strategic investments, a streamlined footprint, and optimised facilities will set the stage for notable improvements in our operational performance as we consolidate activities into world-class facilities.
“Also designed to increase production capabilities in some of our higher-margin value-added product categories, these initiatives will fuel our aspirations to further enhance our value proposition as a high-quality, low-cost processor in the USA.”
Saputo would not give further details of the higher-margin value-added product categories mentioned by Lino Saputo.
Last year, Saputo also announced streamlining activity in Australia, closing one site and downsizing two others. It said it is continuing to “re-evaluate our Australia network”.
Speaking last year, Lino Saputo alluded to potential factory closures as part of the company’s four-year “optimisation” strategy.
“I will say that, by the end of this strategy plan, we will have fewer plants in the US network, we will have fewer plants in the Australian network, still some tweaking that we can do in Canada, not so much tweaking in Argentina because we’ve got two plants running super efficiently. And a little bit of tweaking in the UK, especially now with some of the acquisitions we’ve done,” he said.