Saputo to exit European cheese market with plant closures

Canadian dairy processor Saputo has announced the closure of its cheese production facility in Germany, and has proposed to shut down its facility in Wales, UK, citing challenging market conditions in Europe.

Saputo stated that its European business does not have sufficient critical mass to be profitable and it does not see short to mid-term opportunities to ensure such profitability.

Following the closure of the facilities, Saputo plans to further concentrate its efforts and resources in its existing platforms and other markets.

The company will enter into a 30-day consultation period for the proposed closure of its facility in the UK in accordance with legislative requirements in the region.

About 140 jobs will be affected following the closures and the impacted employees will be provided fair severance and assistance to find re-employment, the company said.

According to the Saputo, the closure of both plants would cost about C$15m ($14.7m) and would also eliminate an annual EBITDA loss of about C$1.5m ($1.46m).

Saputo acquired the German facility in Heiden in 2006, when it acquired the cheese manufacturer Spezialitaten-Kaserei De Lucia, while the UK plant in Newcastle Emlyn, Wales, was acquired in 2007 when it acquired Dansco Dairy Products.

The German facility manufactures Italian speciality cheeses for the retail market segment, while the UK facility primarily produces mozzarella for the food service sector.

Saputo is involved in the production, marketing and distribution of cheese, fluid milk, yoghurt, dairy ingredients and snack-cake products, which are sold in more than 50 countries across the globe.

The company operates about 47 manufacturing facilities, primarily across Canada, the US and Argentina.