Like a defiant survivor, Hytek Ltd. has vowed that its OlyWest pork packing project will go on.
“Hytek has the vision,” said Hytek spokesperson Guy Baudry. “We have the business plan. We are moving forward.”
Baudry’s announcement surprised many in Manitoba when it was made Dec. 5, one day after Quebec packer Olymel and Saskatchewan producer Big Sky Farms announced they were pulling out of the project.
But pork industry insiders say Hytek always planned to carry most of the weight of the project. Sources say Big Sky had committed about $15 million to the $200 million project, and Olymel was mainly committed to managing the plant and marketing the meat it produced.
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George Morris Centre pork industry analyst Kevin Grier said the packing industry’s woes – both Olymel and Maple Leaf Foods are in financial disarray – are due to those companies underinvesting in their facilities, not to hog industry dynamics.
“They hid behind the weak Canadian dollar,” said Grier.
“Fundamentally the industry is at a roadblock right now, so to speak. But people know what it takes to get around it or through it, and that is investment in modern facilities.”
There is no reason a modern and efficient Hytek plant couldn’t succeed, he said.
Olymel said it was backing out of the proposed Winnipeg plant to focus on restructuring its ailing Quebec operations, to implement a double shift at its Red Deer plant, and because of the Manitoba government’s moratorium on new hog barn approval applications.
Big Sky Farms’ Florian Possberg blamed lengthy and onerous environmental regulations and the province’s recent regulatory attack on the hog industry.
Some of the project’s opponents, which included many residents of east end Winnipeg neighborhoods, anti-hog industry activists and some businesses located near the prospective site of the plant, cheered the news that two partners were pulling out.
But others regretted the caustic debate, which has divided Winnipeg and the rest of Manitoba and is believed to have spurred the provincial hog barn crackdown.
Transcona city councillor Russ Wyatt, who led the opposition to the OlyWest plant, called on premier Gary Doer to resign for creating such a volatile and destructive situation.
Winnipeg mayor Sam Katz was happy when Baudry said Hytek was still planning to build the plant.
But both the city incentive package and the provincial incentives, worth more than $20 million, will need to be reapproved because the OlyWest partnership has disintegrated.
“The issue of the loan is obviously off the table and hasn’t been approved in the sense that we have new parties, new conditions, and we will take an absolutely new look at that money,” said Doer.
It is unclear whether Hytek will have to resubmit its OlyWest proposal to the slow-moving Clean Environment Commission.
Recently Maple Leaf Foods announced that it was closing its slaughter plants in Saskatoon and Winnipeg, and the OlyWest problems cap a terrible year for the industry, according to the manager of Manitoba Pork Marketing Co-op.
“The skies that were lined up a year ago sort of unravelled,” said Perry Mohr. “From a packing industry perspective, the perfect storm has come in.”
But Mohr thinks the bad times will pass.
“The pendulum’s at the bottom and the only way it can go is to start swinging up again.”
