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Feature Article - October 20, 2005

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Feature Article

October 20, 2005

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Gray MerriamLegaleseGeneral information and opinion on legal topics by Rural Legal ServicesNature Reflectionsby Jean GriffinNight Skiesby Leo Enright

Harrowsmith cheese factory to close

by Jeff Green

Management and employees at the Saputo Inc. plant in Harrowsmith are keeping a very low profile in the wake of the announcement last Wednesday that the plant will close by the end of next June.

Saputo is a massive company, with revenues of over 1 billion dollars annually. It is the largest dairy producer in Canada, one of the leading cheese producers in the United Sates, and a major corporation in Argentina as well. It also has a snack food division, which includes Vachon cakes, among other brands.


Although Saputo is a publicly traded company, it is still run by the Saputo family of Montreal. A company release concerning the closing of the Harrowsmith cheese plant attributed the decision to the “Company’s continual analysis of its overall activities and the implementation of measures aimed at improving its operational efficiency”. The statement also says the company will spend $4.5 million in what it calls “new fixed assets” at its other plants in order to accommodate the Harrowsmith production, and $1.5 million in closing costs, but expects to save $3.5 million in annual operating costs by closing the plant.

There are 89 people working at the Harrowsmith Saputo plant, and some of them have worked at the plant back in the days when it was a locally owned Cheese factory producing the Harrowsmith brand of Cheddar and other cheeses. Saputo Inc. acquired the Harrowsmith plant in 2001 when it acquired Armstrong Cheese, who were the owners of Harrowsmith Cheese at the time.

Since 2001 Saputo has operated the plant quietly, shifting production from cheddar to specialty cheeses such as Fruilano, Parmesan, and Feta. Just this summer the plant was upgraded; leading workers to think their jobs were secure.

However, Saputo reported on August 2 that first quarter earnings for the current fiscal year are down from last year. This was attributed to lower cheese prices in the United Sates and the strengthening Canadian dollar.

In late September, it was announced that a US Saputo plant, in Whitehall PA, would be closing, throwing 115 people out of work. Two weeks later, the axe fell on Harrowsmith.

According to company spokesperson Manon Goudreault, the two plant closings are not related. The closing of the Whitehall plant is related “to the high price of milk in that part of the United Sates among other factors, but the case in Harrowmsith is different,” Goudreault said. “The Harrowsmith plant required very important investments to be made efficient. The company evaluated all possible scenarios for the plant, and the decided it was the best for the overall growth of the company to shut it down and transfer the production elsewhere. Our main concern now is with the well-being of the employees who will be affected.”

The company has said that the majority of the 89 people affected will be offered employment elsewhere in the company.

Details about those offers have not been made public. However Manon Goudreault said that the company is “going to offer packages to help the employees to transfer to our other plants.” Saputo’s closest plants are in Trenton and Tavistock.

For their part, several workers at the plant said they could not comment on anything related to the cheese factory, its closing, or their future prospects within the company. Plant Manager Paul Pixley said that as of yet he “has not been offered any permanent directions” from the company. He referred all other inquiries to Manon Goudreault in Montreal. (Please see “What do you when your heart starts to pound” on page 2)

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