Saputo Inc. intended to invest CAD 75 million to convert this location into a string cheese packaging facility. The investment will help support the Company's growth ambitions and sustain its leadership position in the string cheese product category. The facility is slated to be operating at full capacity by the third quarter of fiscal 2025.

As a result of this optimization initiative, Saputo intends to permanently close its South Gate, California, facility in the fourth quarter of fiscal 2025, and transfer existing operations from this facility to its newly converted Bardsley Street facility. These capital investments and consolidation initiatives in the Company's USA Sector are expected to yield financial benefits beginning in the fourth quarter of fiscal 2024 and contribute to their full potential of approximately CAD 74 million (CAD 55 million after taxes) annually by the end of fiscal 2027. Costs related to the capital investments and consolidation initiatives outlined above will be approximately CAD 23 million after taxes, which include a non-cash fixed assets write-down of approximately CAD 13 million after taxes.

These costs will start to be recorded in the fourth quarter of fiscal 2023. Approximately 720 employees will be impacted by the above-mentioned consolidation initiatives. Impacted employees will be offered the opportunity to relocate to other Saputo facilities and, if no positions are available, they will be provided with severance and outplacement support.