Canada’s largest dairy producer will close four plants, two of them in Alberta.
Saputo Inc. announced March 26 that it will close plants in Glenwood and Wetaskiwin as well as in New London, Wisconsin, and Hancock, Maryland.
Administrators said the news did not come as a complete surprise to either Alberta community, but it is nevertheless unwelcome.
“Saputo was our single largest employer, so there will be 25 people who are out of work who either live in Glenwood or the surrounding communities,” said Glenwood chief administrative officer Kurtis Pratt.
“Obviously that’s a pretty big stress that those families are going to be experiencing.”
Cheese production in the village dates back to the 1940s, but the plant has produced only dehydrated milk powder in recent years.
“As far as the village is concerned, Saputo represented approximately 88 percent of our non-residential tax base and that accounted for about 40 percent of our municipal operating revenues,” said Pratt.
“So it doesn’t matter how you slice it, we are going to have to reevaluate what we do going forward.”
Glenwood has a population of 290.
Ron Holland, economic development manager for Wetaskiwin, said the plant there, which produced evaporated milk products, was operating at less than capacity so its closure does not come as a surprise.
“I have to believe that there could be some efficiencies gained if they had a little more modern operation,” Holland said.
“You never like to see a plant close and obviously it’s unsettling for the workers. The good news from our standpoint is that we have a very strong local manufacturing industry and there are four major manufacturers in our community that are all growing, expanding, looking for people.”
The Wetaskiwin plant employs 25 people.
Saputo has not released details on the closures. A news release said the first facility closure is scheduled in May but didn’t reveal which of the four it will be. All will be closed by December 2015.
The company said the closures are aimed at improving operating efficiency and will affect 180 employees. Severance and employment support will be provided.
“In relation to these rationalizations, the company intends to add approximately $35 million in new fixed assets in other Saputo facilities and will avoid the same amount in capital expenditures that would have been necessary to upgrade impacted facilities,” it said.
Cost of closures is estimated at $19.8 million.
Pratt said Saputo gave no notice of the plan in Glenwood. Administrators were informed through media calls seeking comment.
He said the village economic development committee is already looking for ways to mitigate the effects. However, Saputo has not revealed its plans for the plant so officials don’t know if the facility will be available to another business.
Holland said the plant in Wetaskiwin, which has been owned by Carnation, Alpha Milk, Dairy World, Armstrong and finally Saputo, has been well maintained and is in a desirable location.
“The site itself is 10.45 acres and it is a square block, so it’s a pretty attractive site from the standpoint of development. It is on a major thoroughfare, which certainly enhances its opportunity in that regard.”