Saputo Inc. (SAPIF) (we, Saputo or the Company) (TSX: SAP) announces today capital investments and consolidation initiatives intended to further streamline its manufacturing footprint in its USA Sector.
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SAPUTO STEP-UP: Saputo has increased its weighted average farmgate milk price for the 2021/22 season in the southern milk region to $7.25 kilogram/Milk Solids.

This announcement marks the continuation of the Company’s network optimization program that plays an integral role in its Global Strategic Plan designed to enhance operations and accelerate organic growth across its platforms.

The Company plans to invest CDN$45 million to convert its long-standing mozzarella cheese manufacturing facility in Reedsburg, Wisconsin, to a goat cheese manufacturing plant to increase capacity, expand our position in growing specialty cheese categories, and improve productivity. In line with the Company’s strategy to modernize its mozzarella operations, current cheese manufacturing from this facility will be transferred to other existing Saputo facilities in the USA Sector, increasing capacity utilization, improving operational efficiencies and reducing costs. Complementing these network optimization activities, Saputo plans to close its existing goat cheese manufacturing facility in Belmont, Wisconsin. Approximately 200 impacted employees from this facility will be provided with financial support including severance. These initiatives will begin in the second quarter of fiscal 2023 and are expected to take up to 18 months to implement.

“The latest series of investments and consolidation activities will strengthen the competitiveness and long-term performance of our cheese operations in our USA Sector, while increasing efficiency and productivity,” said Lino A. Saputo, Chair of the Board, President and Chief Executive Officer. “The initiatives we are announcing today will allow us to enhance our manufacturing footprint and drive organic growth. We have been increasingly focused on accelerating our Global Strategic Plan initiatives, identifying new opportunities to streamline the operating model and further improve our cost structure.”

The capital investments and consolidation initiatives outlined above are expected to result in annual savings and benefits gradually, beginning in fiscal 2024, and reaching approximately CDN$9 million (CDN$6 million after taxes) by fiscal 2025. Costs related with the capital investments and consolidation initiatives outlined above will be approximately CDN$15 million after taxes, which include a non-cash fixed assets write-down of approximately CDN$10 million after taxes. These costs will start to be recorded in the second quarter of fiscal 2023.

About Saputo

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, a leading cheese manufacturer and fluid milk and cream processor in Canada, and the top dairy processor in Australia and Argentina. In the USA, Saputo ranks among the top three cheese producers and is one of the largest producers of extended shelf-life and cultured dairy products. In the United Kingdom, Saputo is the largest manufacturer of branded cheese and a top manufacturer of dairy spreads. In addition to its dairy portfolio, Saputo produces, markets, and distributes a range of dairy alternative cheeses and beverages. Saputo products are sold in several countries under market-leading brands, as well as private label brands. Saputo Inc. is a publicly traded company and its shares are listed on the Toronto Stock Exchange under the symbol “SAP”. Follow Saputo’s activities at Saputo.com or via Facebook, LinkedIn and Twitter.

With calving underway, dairy farmers are being urged to plan ahead to combat feed shortages.

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