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Agropur to Purchase Nova Scotia-Based Scotsburn Dairy
December 1, 2016

Nova Scotia-based Scotsburn has struck a deal to be sold to Quebec dairy giant Agropur Cooperative, the company announced Wednesday afternoon.

Scotsburn began as a creamery 116 years ago in a small Nova Scotia village of the same name. It’s now headquartered in Truro, N.S., and makes ice cream and other frozen treats at three plants.

“It’s not going to be so much a Nova Scotian company or an Atlantic Canadian company anymore,” Scotsburn president Jeff Burrows said in an interview.

He would not say how much the deal is worth.

Agropur wants ice cream

Agropur, which is behind the brands Natrel, Oka Cheese and Iogo, is Canada’s largest dairy producer. In 2015, it made $5.9 billion in sales between its 38 plants across North America, according to its website.

“They don’t have a huge presence in the ice cream industry. We’re bringing that to them,” Burrows said.

Agropur would continue making Scotsburn-branded products, he said.

A spokeswoman from Agropur declined an interview Wednesday.

The board of directors for Scotsburn, which is a co-operative, voted unanimously to sell all its assets. The company’s shareholders still must vote to approve the deal, and it needs the green light from the Competition Bureau of Canada.

Local jobs protected, company says

Board chairman Robbie MacGregor said in a news release that the deal will protect local jobs and maintain frozen dairy production.

Scotsburn employs 360 people in Atlantic Canada and Quebec, including more than 200 unionized workers in Nova Scotia who will keep their jobs, Burrows said.

Agropur will take on the company’s collective agreements.

Downsizing

Scotsburn has downsized in recent years with layoffs and closures.

On Dec. 9, its St. John’s plant is set to close, with frozen treat production moving to Truro and Lachute, Que. In September, the company closed a popsicle plant in Saint John.

The company sold the fluid milk part of its business to Saputo Inc. for $61 million a few years ago.

Scotsburn currently runs a plant in Truro and last year bought Quebec-based Les Aliments Lebel, which employed 160 people.

‘Rough times’

The sale deal came as “quite a shock” to former Scotsburn CEO James MacConnell, who retired in 2005.

“I know they’ve had some rough times,” he said. “Through the years, we did a lot of expansion and it was pretty exciting company, but times change and we used to have thousands of customers and now there’s very few.”

MacConnell started helping out with the original plant in Scotsburn, N.S., at age 10. In 1972, he took over leadership of the company from his father.

“I think that once a head office moves away, you lose a lot more than just a few head office jobs. You lose the community involvement,” MacConnell said.

“Decisions that are made in Nova Scotia by Nova Scotians are going to be more naturally beneficial to the community than those made farther away. But I guess I’m just a real Nova Scotian. I’m certainly glad it’s a Canadian company at least, but it’s a disappointment.”

Creditors

MacConnell said the company has a couple shareholder meetings scheduled in the coming weeks. He expects members, who are mostly dairy producers, to ask a lot of questions.

The final vote by members is set for Dec. 15, Burrows said.

“The margins are tight,” he said. “The competition is fierce and certainly there’s consolidation in the marketplace with regards to the large retailers, and that creates pressures on our margins.”

If the sale goes through, the company will repay creditors, including the province’s Nova Scotia Business Inc., the announcement said.

In 2013, the provincial government, through NSBI, loaned Scotsburn $5.5 million, repayable over 15 years, toward its $10-million expansion. The province also offered the company a $480,000 forgivable loan, depending on jobs created, and $2 million for a novelty ice cream machine.

Scotsburn has more than 270 members in its co-operative.

By: Rachel Ward
Source: CBC News


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