Reeling from losses in its fresh pork business, Olymel has retained former Quebec premier Lucien Bouchard to find ways to restore stability.
The company said in a news release that its fresh pork business lost more than $100 million between 2003 and 2005. It foresees losing another $55 million this year.
The company represents almost 60 percent of the Québec market and also owns a plant in Red Deer. It is a partner in a proposed plant in Winnipeg.
It has suffered from the sharp rise of the Canadian dollar, reducing its profit margins in domestic and foreign markets.
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In this, it echoes the problems of Maple Leaf Foods, which is also scrambling to restructure to restore profitability.
Olymel said it was also hurt by fluctuating hog deliveries and payroll costs that are higher than its competitors.
The Quebec company’s plants are smaller than its American competitors and the hogs it buys are lighter.
“In the case of Olymel alone, almost 4,000 jobs are at risk in the fresh pork sector if nothing is done to improve production, marketing, slaughtering and processing conditions,” it said.
Bouchard has been asked to call on representatives of major farm organizations such as the Union des producteurs agricoles and Quebec’s Federation des producteurs de porc.
He will also seek talks with trade unions representing Olymel employees and meet with representatives of government.
“Bringing together the various players in the pork sector in order to find and put forward solutions and to make a communal effort to consolidate the industry represents the challenge for Lucien Bouchard and a vital necessity for Olymel and for the whole of the sector,” said Réjean Nadeau, president and chief executive officer.
Nadeau noted Quebec’s moratorium on new hog barns decreed in 2002 makes is impossible for Quebec hog farmers to expand their production.
Producers have also struggled with the effects of post-weaning wasting syndrome, which has decimated part of Québec’s hog population.
