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Saputo to expand fluid milk business through Scotsburn deal

By Mark Astley+

21-Jan-2014

Saputo to expand fluid milk business through Scotsburn deal

Saputo has moved to increase its presence in Atlantic Canada through the acquisition of the Scotsburn Cooperative Services’ fluid milk business.

Quebec-based Saputo, Canada’s largest dairy manufacturer, announced late last week that it has entered into an agreement to acquire the fluid milk activities of Nova Scotia-based Scotsburn for CAD$61m ($55.4m, €41m).

In a statement, it claimed that the “transaction will enable Saputo’s Dairy Division (Canada) to increase its presence” in Atlantic Canada – a region made up of Nova Scotia, New Brunswick, Newfoundland, Labrador, and Prince Edward Island.

Scotsburn’s fluid milk business, which employs around 400 people, currently boasts revenue of approximately CAD$160m ($145.4m, €107.5m).

Through the deal, Saputo will inherit Scotsburn’s fluid milk processing facilities in Sydney, Nova Scotia, and Mount Pearl, Newfoundland, and the firm’s liquid milk distribution network in Atlantic Canada.

Saputo expects to complete the transaction, which is subject to approval by Scotsburn Cooperative members and the Canadian Competition Bureau, in or around March 2014.

Ice cream focus

Scotsburn Cooperative, which was established in Scotsburn in 1900, is the largest Atlantic Canadian-owned processor and distributor of fresh dairy products and ice cream. It now collects milk from around 500 dairy farmers in the Atlantic Canada region and employs more than 700 people.

It also operates six processing facilities - manufacturing a wide range of dairy products including fresh and flavoured milk, ice cream, sour cream, and cottage cheese - and 30 distribution centres.

Following the sale of its fluid milk business to Saputo, Scotsburn will continue its other dairy processing activities, said Saputo.

According to reports from Canada, the firm intends to focus its efforts on ice cream.

Speaking with CBC News, Scotsburn president and CEO Doug Ettinger said that in advance of the deal being completed the company is “commissioning a leading-edge, high tech line” at its Truro plant in Nova Scotia to support the growth of its ice cream business.

“The new line that we’re commissioning it Truro allows us to make extruded novelties, which is a fancy word for being able to out larger piece of cookies and brownies and things in an ice cream bar. So it’s very leading edge and will allow us to tap into some new opportunities,” he said.

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