An eastern Canadian flour milling company has bought two flour mills in Saskatchewan.
Dover Industries Ltd., with head offices in Toronto, last week bought the flour milling operations of Dawn Food Products for an undisclosed price.
The sale includes a 375 tonne-per-day capacity mill in Saskatoon and a 30 tonne-per-day organic mill in Humboldt.
The deal is slated to close on Jan. 31.
Dover operates mills in Cambridge and Acton, Ont., and Halifax.
Howard Rowley, president and chief executive officer of Dover, said the company has been looking to move into Western Canada for some time, but the opportunities have been limited.
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“We look at expanding into Western Canada as the next step in giving us a national presence and serving national accounts,” he said.
Rowley added that while the Saskatchewan facilities are in good shape, the company’s goal is to search out new markets and expand the business beyond its current capacity.
“We will certainly spend money on capital improvements as they’re needed and as we see fit, as long as there is some justification for it,” he said.
Shoppers in Western Canada likely won’t be familiar with the Dover name because the company doesn’t sell its own branded flour at the retail level. Instead, it sells to wholesalers and bakers and provides products to private label brands.
Rowley said the company’s customer base for the newly acquired mills will be in the prairie provinces, along with export sales.
Dawn Foods acquired the mills five years ago when it bought the assets of CSP Foods. Dawn’s core business is the production and sale of dry mixes, wet goods such as icings and pastry fillings, and frozen baked goods. It was never interested in getting into the milling business on a long-term basis.
“We don’t own any other flour mills and we’re not experts in flour milling in any way whatsoever,” said Dawn Foods president David Hawkins.
“Dover will bring a lot of firepower and expertise to the milling industry.”
Dawn and Dover have reached an agreement whereby Dover will continue producing dry mixes for Dawn at the Saskatoon plant. Saskatoon will become in effect the prairie distribution centre for Dawn products.
However, Dawn will close and dismantle its wet plant and centralize operations in Toronto.
“We have wet plants in Toronto and in Saskatoon and we’ve been evaluating that for some time,” said Hawkins. “Both plants are significantly under capacity levels, so this deal will force us to rationalize that.”
The closure will result in 14 employees losing their jobs as of April 30.
Hawkins said the company will try to help those workers find other employment and will explore with Dover the possibility of some of them moving to that company. It could even offer some of them jobs in Toronto, but no decisions have been made.
Dale Markling of the Grain Services Union, which represents those employees, along with some of the flour mill employees, said Dawn Foods has been trying to play down the job losses.
In a News release
news and in interviews with Saskatoon media, no mention was made of dismantling the wet plant or the fate of the workers.
Dawn’s labour contracts with the GSU, along with the United Food and Commercial Workers, which represents most of the mill workers, will be transferred to Dover.
Markling said the sale could be a good thing for those working on the milling side if talk about expanding proves out.
“Overall I think Dover is a solid company,” he said. “They bought this mill to have a presence in Western Canada and I’ve heard that they’re looking to grow their business.”
Some Western Producer staff are members of a different local of the GSU.
