Montreal dairy giant Saputo has announced plans to put up $36 million in new equipment at its cheese plants in Canada, mainly during 2014 -- to take up the work from two plants it will close in the first half of the year.
Saputo announced Thursday it will close its cheese manufacturing plant at Warwick, Que., just south of Victoriaville, in June next year and farm out that plant's production to its other facilities in the province.
About 100 employees at the plant will get severance, Saputo said, and may be offered transfers to other plants in the company's Canadian dairy products division.
The Warwick closure comes after the company in late November quietly informed its 40 employees at Winkler, Man. that their plant -- the former Armstrong cheese facility Saputo bought as part of its $407 million takeover of Dairyworld Foods in 2001 -- is scheduled to close in January.
The Winkler staff will also get severance and may also be able to transfer to other Saputo dairy facilities, the company said in its release Thursday.
The Winkler plant had previously been on the receiving end of added production activity when Saputo shut its cheese plant at Souris, Man., southwest of Brandon, in 2002.
Closing the Warwick and Winkler plants is expected to generate about $6 million per year in savings in fiscal 2015 and beyond, Saputo said Thursday.
Factoring in the $36 million in "new fixed assets" to be installed at other Saputo plants, Saputo expects to eat $7 million in costs after taxes relating to the two plant closures, including an after-tax writedown on fixed assets of about $4 million.