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Saputo to close cheese plant in Quebec; 100 jobs affected

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MONTREAL - Canadian cheese giant Saputo Inc. (TSX:SAP) says it will close a manufacturing facility in Warwick, Que., next year, affecting 100 workers as it seeks to cut costs and improve its operational efficiency.

The Montreal-based company said Thursday that cheese production will be shifted from the plant acquired in 2005 to other facilities in the province after the plant is closed in June 2014.

Some employees will be able to transfer to other plants.

Saputo said it has decreased costs over the last year while strengthening its market presence.

In November, it announced plans to close a facility in Winkler, Man., in January 2014, resulting in 40 job losses. The Manitoba plant was part of Saputo's $407-million acquisition of Dairyworld Foods in 2001.

The company said it plans to spend about $36 million, mainly for new equipment in other facilities next year.

The two plant closures will cost about $7 million after taxes, including a $4-million writedown. Annual after-tax savings of $6 million are expected to begin in fiscal 2015.

Saputo spent $52.9 million in 2005 to purchase the manufacturing, marketing and distribution activities of Fromage Cote S.A. and Distributions Kingsey Inc., which made cheddar, Swiss and other specialty cheeses in Warwick and Plessisville, Que. The company also had a cheese aging facility and a cutting/distribution centre. Warwick is the only facility that will be closed.

The Canadian plant closure come a few weeks after Saputo said its nearly seven-year European venture will come to an end with the shutting of cheese processing plants in Wales and Germany.

Saputo is Canada's largest dairy processor and the 12th biggest in the world. It also produces several brands of snack cakes.

On the Toronto Stock Exchange, company shares closed down eight cents to $50.06 in Thursday trading.

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