Canadian co-op to buy 3 cheese plants
01.02.2008 02:01
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- Source: JS Online
Trega Foods, a cheese company that was formed by combining three of Northeast Wisconsin's oldest cheesemakers, is being sold to a Canadian dairy cooperative. The sale is expected to be finalized by the end of February and will include the company's three cheese plants in Little Chute, Weyauwega and Luxemburg, company officials said Wednesday. It's the second time this week that a Montreal cheesemaker has said it intends to acquire Wisconsin cheese factories. Tuesday, Saputo Inc., the largest dairy processor in Canada, said it planned to buy Alto Dairy Cooperative for $160 million. Alto has the largest U.S. cheese plant east of the Mississippi River, in Waupun, and a smaller plant in Black Creek. Between them, they have 467 employees. Trega, based in Little Chute, said it has reached an agreement to be acquired by Agropur, Canada's largest dairy cooperative with sales of about $2.4 billion in 2007. Terms of the sale were not disclosed, but it will be Agropur's second U.S. acquisition since 2002. "We are increasing our presence in the United States, and this business transaction is in direct link with our development strategy," Agropur CEO Pierre Claprood said in a news release. There are no plans to close any of the Wisconsin operations, which combined have 320 employees. All Wisconsin employees are being offered jobs at the same pay and benefits they receive now, said Doug Simon, Trega president. "We will continue to supply the same customers. The plan is to continue to grow the business," Simon said. Trega, established in 1940, is the combined company of Weyauwega Milk Products, Krohn Dairy Products and Simon's Specialty Cheese. It has about $300 million in annual sales and processes about 650 million liters of milk a year. The company is being sold to ensure its long term viability, Simon said. "It has nothing to do with our current financial position. We are very strong financially, but as with any privately held company, you face a point in time where you have to retire shareholder stock. We cannot do that and jeopardize the future of the company and our ability to continue investing in the business," Simon said. Trega will continue operating under its Wisconsin management, with Simon reporting to the president of Agropur's cheese and functional products division. The company will keep all current operations under the name Trega Foods Ltd. Increased Canadian ownership of Wisconsin cheese plants is an interesting development in a highly competitive industry, said Michael Hutjens, a University of Illinois Extension dairy specialist. "I don't think there would be much movement of milk across the border because of tariffs and restrictions. My guess is the Canadian cheesemakers are just seeing these acquisitions as an opportunity to expand and get a little more reach with their dairy programs," Hutjens said. Agropur, founded in 1938, has 3,600 member/owners, 4,400 employees and manufacturing plants in the United States, Canada and Argentina. It processes about 2 billion liters of milk a year into dairy-product brands including Quebon, Oka, Sealtest and Natrel. Trega's products include cheddar, feta, mozzarella and provolone cheeses. The company has a retail store in Little Chute, near Appleton, that's a tourist attraction. "It's one of those industries that not only creates a product but brings a lot of people to the area," said Village Administrator Charles Kell. About 90% of Wisconsin's farm milk goes into making cheese - which is one of the state's largest industries. Sargento aidWednesday, Sargento Foods Inc., which has cheese plants in Plymouth, Hilbert and Kiel, said it will receive $4.25 million in tax credits and other state assistance to help with $55 million in expansions that are supposed to create 500 jobs over five years. The funding will include $3 million in Enterprise Development Zone tax credits. Sargento, founded in Plymouth in 1953, has 1,140 employees. About 150 of the new jobs will be in Plymouth, where the company recently completed a large expansion and plant renovation. Most of the jobs will be in manufacturing, said Mark Rhyan, Sargento executive vice president and chief operating officer.
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