Saputo cheese company closing 2 plants in Alberta
Plants located in Wetaskiwin and Glenwood
Some Albertans working for the Saputo cheese company found out Wednesday they may be out of a job.
The company announced it is closing two plants in Alberta — one in Wetaskiwin and another in Glenwood. Two more plants in the United States are also being shut down.
"Over the recent years, Saputo has maintained efforts to pursue additional efficiencies and decrease costs while strengthening its market presence," the company said in a release.
The company says 180 employees will be impacted, but it's not known how many of those are based in Alberta. Saputo said workers will be given severance and outplacement support and some will be offered the possibility of transferring to other Saputo locations.
Saputo says the cost of upgrading the facilities was too high and this move will save about $4.8 million a year. The shutdowns will begin in May and be completed by December 2015.
The company's other facilities are expected to take over production.
Saputo is one of the top 10 dairy processors in the world and the largest in Canada. Some of the products it produces include Armstrong Cheese, Dairyland and Milk to Go.
Glenwood shutdown to have an impact
The Village of Glenwood, which is located north of Cardston in southern Alberta, says it is losing its biggest employer and it will have a huge impact on the community of roughly 280 people.
The Glenwood plant produced dried milk.
Kurtis Pratt, the chief administrative officer for the village, says Saputo employs 25 people and accounts for 88 per cent of its non-residential tax base.
He says they didn't get any advance warning before the company's press release was made public.
"So we're still learning all the details. We tried to contact the plant but ... they're not saying anything more than what was on the initial press release," said Pratt.
"So we're still learning how exactly it's going to affect us going forward, but I mean we have some understanding of how it will impact our initial operations as a village."
Pratt says the main concern right now is for the people who are losing their jobs.
2nd year of closure announcements
The closures mark the second year in a row Saputo has announced a spring downsizing of its Canadian operations.
Last March, its announced plans to close a manufacturing facility as of June 2014 in Warwick, Que., affecting 100 workers. That followed its decision several months earlier to close a facility in Winkler, Man., that was part of its $407-million acquisition of Dairyworld Foods in 2001.
Chief executive Lino Saputo Jr. didn't mention the plant closures during a presentation Wednesday to a CIBC retail and consumer conference where he described the company's Canadian operations as "very stable" despite the high cost of milk.
"Our platform is very good, very solid, generating very good cash flows for us but it's not a growth platform and it's not a platform where we can export from," he said from Toronto.
"Very happy with it but really our growth is coming from outside of Canada."
He pointed to the United States, where Saputo is the third-largest cheese manufacturer and where its sees great acquisition opportunities in a fragmented market. He also noted 17 per cent of total production is exported, up from three per cent a decade ago.
Saputo also said the Montreal-based company is considering a number of acquisitions in Brazil, Australia and New Zealand.
With files from The Canadian Press