Saputo Dairy Australia (SDA) will close its King Island Dairy facility next year due to the brand’s financial difficulties.
According to SDA, the company has been seeking solutions to maximise the brand’s value, including a potential sale to a third party, over the past 10 months. However, after considering all options, closing the facility “was determined as the most viable way” to increase SDA’s efficiency in light of changing industry and market conditions.
“As King Island Dairy’s historic roots are deeply embedded in the region, it was hoped the strategic review would identify a potential buyer for the facility,” said Leanne Cutts, president and chief operating officer (international and Europe), Saputo Inc.
“It is a unique brand, with a plant that is nearly 100 years old and designed to produce hand-made specialty cheeses.”
Cutts additionally said that SDA has invested over $40 million in all of its Tasmanian operations during the past five years. King Island Dairy has struggled to maintain its position in today’s ultra-competitive food market.
“This decision does not reflect the commitment of our hard-working and dedicated King Island employees and dairy farmers,” he added.
Approximately 58 affected employees have been notified of the decision. SDA says it is going to consult with employees, union representatives, dairy farmers, consumers, the King Island Council, and the Tasmanian Government about the decision’s implications and ongoing transition support.
In the meantime, King Island Dairy will continue to produce its cheeses while it implements a closing transition plan.
