Saputo Announces Plant Closures in Canada
(Montréal, March 22, 2016) – Saputo Inc. (TSX: SAP) (“Saputo” or the “Company”) announces today measures aimed at improving its operational efficiency. Saputo will close three of its facilities in Canada, in Sydney (Nova Scotia), Princeville (Québec) and Ottawa (Ontario). The closures are scheduled in June 2016, August 2016 and December 2017 respectively. The current production will be integrated into other Saputo facilities. In all, approximately 230 employees will be impacted. These employees will be provided with severance and outplacement support; and some will be offered the possibility of transferring to other Saputo locations.
Over the recent years, Saputo has maintained efforts to pursue additional efficiencies and decrease costs while strengthening its market presence. The announced measures are part of the Company’s continual analysis of its overall activities.
In relation to these rationalizations, the Company intends to add approximately $32 million in new fixed assets in other Saputo facilities over the course of the next two fiscal years as part of normal capital expenditure planning. Costs connected with the closures will be approximately $23 million after taxes, which include an after tax fixed assets write-down of approximately $19 million. These costs will be recorded in the fourth quarter of fiscal 2016. Annual savings after taxes should commence in fiscal 2017 and gradually increase over the next two fiscal years, reaching approximately $7 million in fiscal 2019.
Saputo produces, markets, and distributes a wide array of dairy products of the utmost quality, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients. Saputo is one of the top ten dairy processors in the world, the largest cheese manufacturer and the leading fluid milk and cream processor in Canada, the third largest dairy processor in Argentina, and the fourth largest in Australia. In the US, Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products. Our products are sold in several countries under well- known brand names such as Saputo, Alexis de Portneuf, Armstrong, Bari, Baxter, Black Creek, Chevrai, COON, Cracker Barrel*, Dairyland, DairyStar, Dragone, DuVillage 1860, Friendship, Frigo Cheese Heads, Great Midwest, Kingsey, La Paulina, Milk2Go/Lait’s Go, Mil Lel, Neilson, Nutrilait, Organic Creamery, Ricrem, Salemville, Scotsburn*, Stella, Sungold, Treasure Cave, Wholesome Goat and Woolwich Dairy. Saputo Inc. is a publicly traded company and its shares are listed on the Toronto Stock Exchange under the symbol “SAP”.
*Trademark used under licence.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of securities laws. These statements are based, among other things, on Saputo’s assumptions, expectations, estimates, objectives, plans and intentions as of the date hereof regarding projected revenues and expenses, the economic, industry, competitive and regulatory environments in which the Company operates or which could affect its activities,
its ability to attract and retain customers and consumers, as well as the availability and cost of milk and other raw materials and energy supplies, its operating costs and the pricing of its finished products on the various markets in which it carries on business.
These forward-looking statements include, among others, statements with respect to the Company’s short and medium term objectives, outlook, business projects and strategies to achieve those objectives, as well as statements with respect to the Company’s beliefs, plans, objectives and expectations. The words “may”, “should”, “will”, “would”, “believe”, “plan”, “expect”, “intend”, “anticipate”, “estimate”, “foresee”, “objective”, “continue”, “propose” or “target”, or the negative of these terms or variations of them, the use of conditional tense or words and expressions of similar nature, are intended to identify forward-looking statements.
By their nature, forward-looking statements are subject to a number of inherent risks and uncertainties. Actual results could differ materially from the conclusion, forecast or projection stated in such forward-looking statements. As a result, the Company cannot guarantee that any forward-looking statements will materialize. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause actual results to differ materially from current expectations are discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time, including the “Risks and Uncertainties” section of the Management’s Discussion and Analysis included in the Company’s 2015 Annual Report.
Forward-looking statements are based on Management’s current estimates, expectations and assumptions, which Management believes are reasonable as of the date hereof, and, accordingly, are subject to changes after such date. You should not place undue importance on forward-looking statements and should not rely upon this information as of any other date.
Except as required under applicable securities legislation, Saputo does not undertake to update or revise these forward-looking statements, whether written or verbal, that may be made from time to time by itself or on its behalf, whether as a result of new information, future events or otherwise.
Media and Investor Relations
Director, Corporate Communications