Saputo announced today its plans to close its cheese manufacturing plants in Heiden, Germany and Newcastle Emlyn, Wales, United Kingdom. The closures will affect approximately 140 employees.
The plants to be closed were acquired by Saputo in 2006 and 2007. The Germany-based plant produces Italian specialty cheeses for the retail market and the UK-based facility manufactures mozzarella for the food service market.
The closures are a direct result of Saputo’s competitiveness in Europe. Hoping to penetrate the market from the acquisition of the factories, Saputo has determined that Saputo European “does not have sufficient critical mass to be profitable.” Even further, Saputo does not see short or mid-term opportunities available from the plants.
“Saputo has therefore decided to close its Germany plant and proposes the closure of its United Kingdom facility, subject to the consultation period, to further concentrate efforts and resources in its current platforms and other markets,” said Saputo in an official statement.
Saputo expects the closure of the plants to cost an estimated $15 million after taxes and a total of $1.5 million in annual earnings. The closure of the UK-based plant is subject to a 30 day consultation period according to legislative requirements.
Saputo, a Canadian-based cheese manufacturer, currently operates 47 plants worldwide, serves customers in over 50 countries and employs 10,100. Saputo is the largest dairy processor in Canada, third largest in Argentina, the 12th largest globally and is among the top three cheese producers in the US.