MONTREAL (CP) - Saputo Inc. is closing an Ontario cheese plant and streamlining operations, resulting in the cheesemaker cutting 62 jobs.
The Cookstown, Ont., plant, which employs 26 people, will close on Aug. 1, the Montreal-based company said Thursday, citing an international ruling against Canadian cheese exports.
Meanwhile, 12 full-time and 24 part-time employees will be laid off as the company transfers some production from its plant in St-Raymond-de-Portneuf, Que.
The company said the moves follow "a re-evaluation of its Canadian facilities and the optimization of its production capacities due to a decision by the World Trade Organization concerning the Canadian system of the supply of milk to be used in products for the export market."
To comply with the WTO ruling, Saputo said, Canadian dairy processors would be forced to export their products at uncompetitive prices.
Saputo expects the after-tax costs connected with Thursday's cuts will be about $1.1 million, but resulting annual savings are estimated at $1.7 million.
The deputy mayor of Innisfil, the municipality that includes the 1,500-resident hamlet of Cookstown, was surprised when told of the closure.
"Saputo is a steady employer and has been there for years," Barb Baguley said in an interview .
"When you look at 30 employees, it doesn't seem like a lot in the big scheme of things, but the reality these days is that 15-30-50-employee-type businesses are the mainstays of commerce in small towns."
The Cookstown shutdown will leave Saputo's cheese division with 17 plants in Canada.
Earlier this month, Saputo announced it increased its profit by 8.4 per cent last year even though lower U.S. cheese prices and a stronger Canadian dollar contributed to a decline in revenues.
Net earnings for the year ended March 31 were $173.7 million, up from $160.2 million in the previous year.
Shares in Saputo (TSX:SAP) fell 28 cents to $26.10 Thursday on the Toronto stock market.
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