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August 5, 2022

Saputo to close one US cheese plant, expand another

Saputo said the moves are intended to “further streamline its manufacturing footprint in the US”.

By Andy Coyne

Canadian dairy major Saputo is to close a cheese plant in the US, impacting 200 employees.

The Toronto-listed firm plans to shutter the goat’s cheese manufacturing facility in Belmont, Wisconsin, but will invest CAD45m (US$34.7m) to convert its mozzarella plant in Reedsburg, in the same state, to goat cheese.

Saputo said the moves are intended to “further streamline its manufacturing footprint in its US”.

It added: “This announcement marks the continuation of the company’s network optimisation programme that plays an integral role in its global strategic plan designed to enhance operations and accelerate organic growth across its platforms.”

Saputo said converting the Reedsburg facility into a goat’s cheese manufacturing plant will “increase capacity, expand our position in growing speciality cheese categories, and improve productivity”.

It said mozzarella production will be transferred to other existing Saputo facilities in the US, “increasing capacity utilisation, improving operational efficiencies and reducing costs”.

With regard to the 200 employees affected by the Belmont facility closure, Saputo said they will be provided with financial support, including severance.

These initiatives will begin in the second quarter of fiscal 2023 and are expected to take up to 18 months to implement.

CEO Lino Saputo, Jr. said: “The initiatives we are announcing today will allow us to enhance our manufacturing footprint and drive organic growth. We have been increasingly focused on accelerating our global strategic plan initiatives, identifying new opportunities to streamline the operating model and further improve our cost structure.”

The company said the capital investments and consolidation initiatives are expected to result in annual savings and benefits gradually, beginning in fiscal 2024, and reaching approximately CAD$9m by fiscal 2025.

In February, Saputo announced it was to to shut a production facility in Tulare, California, as part of efforts to “optimise and enhance” its operations.

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