Having beat a three-year, $75 million goal for cost cuts, Canadian dairy co-operative Agropur has set the bar at nine figures for the next three-year period.
The Quebec-based co-op on Wednesday booked net earnings of $47.5 million on sales of $5.875 billion in its fiscal year ending Oct. 31, 2015, up from $38.31 million on $4.662 billion in fiscal 2014.
The company also declared a deep cut in its patronage dividends, at $40.6 million for 2015, down from $92.3 million the previous year and $110.5 million in 2013.
The company, as part of the “Agropur 2015” strategic review it launched in 2012, set a goal that year of “generating $75 million in increased earnings before interest, income taxes, depreciation, amortization and joint ventures” (EBITDA) over 2013 to 2015.
In its 2015 annual report this week, the company instead described its 2012 goal as being “to reduce our costs by $75 million by 2015,” and added it has “exceeded that objective, with savings on an annualized basis of $84 million.”
In its year-end release Wednesday, the company said that for 2016, it has launched a new “three-year, $100 million cost-reduction program.”
Agropur, whose brands include Natrel, Quebon and Island Farms, didn’t specify Wednesday what it plans to do to meet the deeper cost-cutting target.
CEO Robert Coallier said in the annual report, however, that the company “will seek further synergies.”
Agropur in 2015 closed the deals it announced the previous year, buying the assets of New Brunswick’s Northumberland dairy co-operative, and Sobeys’ former Canada Safeway milk processing plants.
“The addition of the five acquired plants gives (Agropur) a national footprint,” the company said Wednesday.
During 2015, the co-op announced plans to shut an aging Montreal-area fluid milk processing plant at Saint-Bruno-de-Montarville by late May this year.
Agropur also said in November it will close the former Grace-Mar Dairy plant at Chilliwack, B.C. by late October this year, upgrade the former Safeway plant at Burnaby and shift its B.C. fluid milk processing there.
The company’s B.C.-based Island Farms arm also announced in October it would discontinue its yogurt line due to “declining” sales in recent years.
On the investment side in 2015, Coallier noted the company also improved its Oka cheese production capacity and completed major upgrades on plants at Lethbridge, Alta. and St-Hyacinthe, Que. plants, plus an aseptic product line at Bedford, N.S.
Agropur, he said, also completed the first phase of a project to standardize its computer platforms and processes under “a single solution.”
Agropur on Wednesday also noted its U.S. operations have contributed a “significantly increased proportion of total revenues” in 2015, at 44 per cent, up from 36 per cent the previous year.
In its U.S. plants, Coallier said, Agropur has increased its feta cheese capacity by 30 per cent and tripled its mozzarella capacity. — AGCanada.com Network