USA – Canadian dairy company Saputo has announced plans to close the Bardsley St. facility in Tulare, California as part of efforts to “optimise and enhance” its operations.
According to a statement from the Montreal-based company, the plant will cease operations in fiscal 2023.
The company insisted the impact on staff would be “minimal” as “opportunities for employment will be available” at other Saputo facilities in Tulare.
Plans are also underway to reduce operations at plants in Cobram and Maffra, both of which are in Australia.
A limited number of employees will be impacted and Saputo has committed to providing them with severance and outplacement support.
It also revealed that is exploring redeployment opportunities for some of the affected employees.
US$133m investment on factory upgrades
Saputo also said it will invest approximately C$169 million ($133 million) to expand cheese manufacturing plants in California and Wisconsin to support its growth in the retail market.
“Staying true to our disciplined approach and commitment to shareholder value creation, we are executing our global strategic plan with intention and precision,” said Lino A. Saputo, president and chief executive officer.
“Today’s announcement is the first in a series of investments and consolidation activities that will increase efficiency and productivity, improving our ability to meet the evolving needs of our customers and consumers.”
Investment in the two facilities will start in the fourth quarter of Saputo’s current financial year.
The company said the moves are expected to lead to “annual savings and benefits gradually”, reaching approximately CAD83m (US$65m) after tax – by the end of its 2025 fiscal year.
Last June, the company set out a four-year plan to drive its sales and earnings growth.
Under the strategy, Saputo said it would embark on a four-year cycle of capital expenditure that would increase by around CAD550m (US$432m) from historical levels.
Around CAD2.3bn (US$1.8bn) was earmarked through the course of the project to “optimise” production including investments in capacity, innovation, and automation to address concerns around labour availability.
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