Parmalat is currently negotiating a $1.62-billion deal to acquire Kraft Hienz Canada’s natural cheese division. Parmalat CEO Mark Taylor hopes that the Ingleside plant will be part of the expansion to meet the demands of growth in the market and populations. Sawyer Helmer photo
by Kory Glover
AgriNews Staff Writer
ONTARIO – Parmalat have been in negotiations since early November to acquire Kraft Heinz, Canada’s natural cheese division, valuing at $1.62-billion.
Parmalat CEO, Mark Taylor said that Kraft did a strategic review of their business and that they concluded that they wanted to focus more on the other categories where they typically operate which are core to their business model.
“I think that led them to the conclusion to consider divestment” said Taylor. “We would’ve been contacted by their advisers to see if there was any interest. Of course, Parmalat saw this as a significant opportunity to advance our strategy in Canada as a good fit between the two businesses. It strengthens our network in eastern Canada and it allows us to better serve our customers.”
One of the bigger concerns surrounding this deal was job security within the Ingleside plant, which employs approximately 380 workers. Taylor states that while jobs will be created in a headquarters building in Toronto, he also hopes that Ingleside is part of that expansion to meet a growing demand of product.
“There’s around 380 people employed at Ingleside and we will need to expand our headquarter functions to properly support the business. So there will be jobs created in this facility in Toronto,” he said. “In terms of the site, this deal still needs to be approved by competition authorities. We’re not assuming anything at this stage, the competition bureau have to do their work. We hope that will be concluded successfully and allow us to move on to the next phase. This is very much the beginning of the future of another 140 years in the Canadian dairy industry’s history and for us it’s about growth and expanding our capabilities and our assets include the Ingleside facility. Populations and demand is growing and we see that as a significant opportunity to grow our business to meet that demand.”
Taylor continued, “the Ingleside facility is very well placed and invested in and it’s got a good team of people who are experts in their field and our mission is to support them to do more, more of what they do.”
Despite the change in ownership, the Ingleside facility does not expect to have much difference in the producers who ship milk to the location or to production. Taylor states that he does not foresee any changes if and when the deal finally goes through.
“I wouldn’t be anticipating any changes when it seems that the milk supply organizations have optimized the supplies from farms,” he said. “They’re in a great position to ensure a continuity of supply of high quality products, which is exactly what we need. I’m a great believer of if it’s working now, then we’ll continue to support the process.”
Despite Kraft being an American owned business, Taylor said that Parmalat will still continue the use of Canadian product with their business model.
“We always seek to be 100 per cent Canadian,” he said. “Parmalat has got a very long Canadian heritage going back about 140 years; going back to about 1881. The business has an extremely long standing in Canada and an extremely close relationship with Canadian dairy farmers. That is something we value very highly.”
Taylor says that with this upcoming deal, production will continue strong as the site is continuing to perform at current capacity and that there is room for expansion.
“It’s important to say that the site has been operating at around its current capacity in terms of cheese maker,” he said. “There is headroom for expansion in terms of the cutting and packing operation. Clearly, we’re a consumer and customer business but our hope is that customers will continue to support the business with volume that it needs to breath and continue to expand.”
Taylor says that the deal could be finalized in the next six to nine months, but hopes that it will be much sooner.