Canadian Manufacturing

Bearing blunder costs Saputo $1.9M

A tiny part in an unidentified Saputo Inc. processing plant helped spread Listeria bacteria.

MONTREAL—Canadian cheese and dairy giant Saputo Inc. said a small part on a production line of a Quebec plant was the cause of last year’s cheese recall that will cost the company more than $1.9 million.

An investigation identified the problem as a bearing housing on the chill roll, which helped spread Listeria bacteria.

“Corrective measures are being implemented and the production line is set to be recommissioned during the first quarter of fiscal 2012,” said the food firm’s CEO Lino Saputo Jr. during a conference call about third-quarter results.

The part has been ordered and will be installed at the unidentified facility before production resumes next summer.

The $1.9-million cost includes the value of the cheese and the cost to handle the returned cheese, but not to replace the deficient part.

No illnesses were reported by the recall of nine products or a total of 150,00 kilograms of cheese.

Saputo spokeswoman Sandy Vassiadis said the company has taken steps to ensure a similar problem doesn’t recur at other lines.

“It wasn’t a question of not being clean enough, it was just different changes and different factors that caused the cross contamination,” she said in an interview from Tulare, Calif., where officials were visiting a plant near Fresno.

Vassiadis added that new technology is being used in the replacement part to prevent contamination.

The Montreal-based company said earned $111.8 million for the period ended Dec. 31 on revenues of nearly $1.5 billion, compared to net earnings totaling $104.3 million last year.

Saputo’s operations in Canada and Argentina earned $125.5 million on $995.2 million of revenues. That compared with $115.4 million on $960.2 million a year earlier.

The company’s U.S. operations earned $61.4 million on $510.2 million of revenues, compared with $63.7 million on $498.1 million in the 2010 period.

Lino Saputo said optimism has returned to the U.S. dairy industry as both the food services and retail business is showing signs of rebounding from the recession.

Saputo produces, markets and distributes cheese, milk, yogurt and dairy products in Canada, the United States, Europe and Argentina. It is also Canada’s largest snack cake producer.

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