French dairy processing company Saputo is planning to close three manufacturing facilities in Canada located in Sydney (Nova Scotia), Princeville (Québec) and Ottawa (Ontario).
The plant closures are expected to take place in June 2016, August 2016 and December 2017 respectively.
Following closure, production at these three facilities will be integrated into Saputo's other facilities.
The move is expected to impact around 230 employees. However, the company claims that the affected staff would be provided with severance and outplacement support.
Some employees would also be offered option to get transferred to other Saputo locations.
In the recent years, Saputo is seeking to gain additional efficiencies and reduce operational costs while hoping to strengthen market presence.
The latest measures are part of the company's continued review of its overall activities.
Saputo plans to add around $32m in new fixed assets at other Saputo facilities over the next two fiscal years under its normal capital expenditure planning.
The costs linked with the closures will be around $23m after taxes, including an after tax fixed assets write-down of around $19m. The costs will be recorded in the fourth quarter of fiscal 2016.
Saputo produces, markets, and distributes a wide array of dairy products such as cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients.
Last October, Saputo had acquired goat cheese manufacturer Woolwich Dairy for C$80m ($61m), in an all-cash, debt-free transaction. The acquisition was intended to expand Saputo's presence in North America's specialty cheese sector.
Image: Saputo decides to close plants to achieve operational efficiency. Photo: Courtesy of Serge Bertasius Photography/FreeDigitalPhotos.net.
