Following its victory in the three-way bidding war to acquire Warrnambool Cheese and Butter (WCB), Saputo has set its sights on expanding its existing presence in Canada, the US, and Australia and on breaking new ground in Brazil and New Zealand.
During a conference call to coincide with the release of the company's Q3 results last week, Saputo CEO, Lino Saputo, said that it will “continue to look for growth opportunities.”
Saputo's comments come just weeks after the company secured a majority stake in WCB after a hard-fought, three-way battle with Australian dairies, Murray Goulburn and Bega Cheese.
Riding high on this victory, the company is considering additional investment in the US and Australia and could expand into Brazil and New Zealand.
Saputo added that he would not be “overly surprised” to see the company make acquisitions in Canada.
Saputo, which now boasts operations in Canada, the US, Argentina, and Australia, made several strategic acquisitions in the last year including the acquisition of WCB in Australia and Morningstar in the US. CEO Saputo indicated that the company plans to build on these deals.
“I’d say that now with Warrnambool we have a strong solid platform in Australia," he said. "Perhaps there could be some other small tuck-in businesses in Australia we would be more than happy to look at it now that we have a management team there that would be able to absorb it and manage it and run it.”
“I see that in the US – both on the cheese and dairy foods side – despite our size we represent a small percentage of the overall volume. So I think that there could be other potential acquisitions in the US.”
He also touched on Saputo’s longstanding interest in emerging market Brazil and established market New Zealand.
“…we have taken trips to Brazil on a number of occasions," said Saputo.
“We’re exporting product from our operations in Argentina to Brazil. So it’s a natural evolution for us to be a player with a manufacturing infrastructure in Brazil. We just need to find the right one at the right price with the right strategic value for us.”
“And I would also say that New Zealand looks pretty interesting for us as well now that in Oceania we do have that infrastructure," he said.
“I feel very good about our position on the world stage in dairy.”
Last month, the Quebec-based dairy manufacturer also announced that it had entered into an agreement to acquire the fluid milk activities of Nova Scotia-based Scotsburn Cooperative Services for CAD$61m ($55.4m).
The competitive nature of the Canadian dairy industry may force Saputo to further increase its hold on the sector, said Saputo.
“There is the three of us that have about 75% of the milk intake here in Canada," he said.
"The characteristic of this market is that the only way that you can find growth is to either steal volume from your competitor or perhaps even to make some acquisitions. I’ll not be overly surprised to see ourselves and perhaps some of our competitors making acquisitions.”