ITALY – Nuova Castelli, a subsidiary of French dairy company Lactalis, has announced plans to close 2 of its factories located in southern Italy.

This number is in addition to the six it has previously closed since the company became the property of Lactalis.

The company, which Lactalis acquired in 2019, is planning to close plants in the Tuscan town of Ponte Buggianese and in Reggio Calabria, a town in the south of the country.

Both factories are part of Nuova Castelli’s Alival subsidiary. If the two factories close down, Nuova Castelli will have 12 factories left.

Nuova Castelli is focused primarily on Italian protected designation of origin cheese products such as parmigiano reggiano, grana padano and gorgonzola.

In an announcement, Nuova Castelli says the changes are urgent and necessary to rebalance the company’s operations, which have been struggling for a very long time.

 The company further revealed that the rising cost of production and the new Russia-Ukraine war further exacerbated the company’s problems, making the decision to close inevitable.

Nuova Castelli insisted the proposed closures had been its decision and had not been influenced in any way by its parent company Lactalis.

The company which has a workforce of 574 people has informed unions of the plans and is preparing for talks on how to mitigate the impact on employees. It has however not disclosed how many workers would be affected by the closures.

The production at the two sites set to close will be “absorbed” by the remaining facilities, the company said.

Lactalis acquired the business, which had been majority-owned by UK-based private equity firm Charterhouse Capital Partners, three years ago.

The French company, which is the most important dairy corporate by way of annual earnings, owns 100% of Nuova Castelli – with the exception of gorgonzola unit Caseificio Cairati, of which it owns 51%.

At the time of Lactalis’s acquisition, Nuova Castelli had around 1,000 workforces and around 20 factories, and an annual turnover of EUR460million (US$512.6million).

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