Saputo is weighing up the future of one of its production sites in Australia.
The Canada-based dairy group has been reviewing its manufacturing network to cut costs and boost efficiency.
Saputo’s moves have included closures in Australia and in North America. The company has also struck a deal to sell sites in Australia, although that transaction is still awaiting a verdict from local competition officials.
The company, which according to Rabobank is one of the world’s ten largest dairy companies by annual turnover, said today (8 November) it had hired advisers to look at options for its King Island Dairy cheese factory in Tasmania.
Saputo acquired the facility in 2019 when it snapped up cheese assets from Australia-based food and beverage group Lion. Some 63 staff work at the site.
“As King Island Dairy’s historic roots are deeply embedded in the region, we hope to find a buyer for the facility to ensure the continued success of its renowned specialty cheese products,” Leanne Cutts, the president and COO of Saputo’s international and Europe division, said.
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By GlobalData
Saputo plans to put more investment into other sites in Australia, including in Tasmania. Earlier this year, it earmarked cash for its facility in Smithton after closing a site in Victoria.
Cutts added: “In making these investments and strategic decisions, we remain focused on maximising our return for every litre of milk to further enhance SDA’s [Saputo Dairy Australia’s] position as a high-quality, low-cost processor in Australia.”
Last week, the company said it would shut a manufacturing facility in the US.
The company will close its site in Lancaster in Wisconsin in the fourth quarter of its 2024 financial year, a three-month period that runs from January to the end of March next year.
In August last year, Saputo announced the closure of another plant in the state. The cheese factory in Belmont will shut in the same quarter as the Lancaster site. Saputo has recently converted a third plant in Wisconsin. The facility in Reedsburg will take on the production carried out in Lancaster.
Saputo is scheduled to publish its second-quarter financial results this week.
In the first quarter of the company’s current financial year, the company’s revenue fell 2.8% to C$4.2bn ($3.04bn).
“Adjusted” EBITDA rose 4.3% to C$362m but Saputo admitted it would not meet a target it had set for that metric by its fiscal 2025 year due to waning consumer demand and continuing “market headwinds”.
In April, Saputo announced plans to sell two factories in Australia to Coles, the country’s second-largest grocer.
However, in September, Australia’s competition regulator pushed back its decision on the deal.
The Australian Competition and Consumer Commission (ACCC) was due to present its conclusions on 14 September but said it is still gathering feedback from “parties” that had previously voiced concerns over the deal.
