Canadian dairy giant Saputo plans on further “maximizing its manufacturing footprint” in Canada in the next few years, starting with a new $240 million Vancouver-area processing plant at Port Coquitlam.
The “state-of-the-art” plant is expected to be built within the next three years and commissioned in fiscal 2021, the company said in its fiscal 2018 report last Thursday.
To that end, the company also said in its annual report it has made a deal to sell its current Vancouver-area dairy plant at Burnaby to an unnamed buyer for $218 million.
Saputo expects to close the Burnaby sale sometime in its 2019 fiscal year, and to lease that plant from the new owner until the Port Coquitlam facility is ready.
Saputo has owned the Burnaby plant since 2001, when it bought milk processor Dairyworld Foods from Agrifoods International Co-operative.
In its year-end outlook last Thursday, Montreal-based Saputo said it “will undertake capital projects aimed at increasing efficiencies and maximizing its manufacturing footprint in order to maintain its leadership position.”
The company, billed as Canada’s largest cheesemaker and leading fluid milk and cream processor, also said it will continue to focus on “reviewing overall activities to improve operational efficiency, in order to mitigate downward margin pressures, low growth and competitive market conditions.”
“Operational efficiency” led to the closure of three Saputo plants in Canada in 2016, in Sydney, N.S., Princeville, Que., and Ottawa.
It also announced late last year it will shut a U.S. cheese plant at Fond du Lac, Wisconsin and move that plant’s production to its site at Almena, Wisc., about 425 km northeast. That closure is expected in the first quarter of fiscal 2019.
The company — also billed as one of the world’s 10 biggest dairy firms — remains on the expansion track as well, having closed its $1.29 billion deal for Australian dairy co-operative Murray Goulburn in April, and a $340 million deal for Wisconsin goat cheese processor Montchevre in December.
It also announced last month it will buy Ontario processor Shepherd Gourmet Dairy to boost its presence in specialty cheeses and expand its yogurt offerings in Canada. That deal, worth $100 million, is expected to close later this month.
Saputo, whose Canadian brands include Dairyland, Armstrong, Neilson, Baxter and Milk2Go, among others, last Thursday booked net earnings of $852.5 million on $11.54 billion in revenues for its year ending March 31, up from $731 million on $11.16 billion in the 2017 fiscal year.
Fourth-quarter net earnings were down at $130 million, on $2.74 billion in revenues, compared to $165.2 million on $2.72 billion in the year-earlier period. — AGCanada.com NetworkTagged Burnaby, dairy, Dairyland, Dairyworld, Port Coquitlam, Saputo