Increase exports | Itochu’s investment in the Manitoba hog processor may open doors to Asia
A Japanese company’s investment of $56 million into Hylife, the largest hog production company in Canada, should help stabilize Manitoba’s hog industry, says Hylife’s chief manager
Itochu, a trading company based in Tokyo with investments in 400 companies worldwide, announced in early January that it had acquired a 33.4 percent stake in Hylife, which produces 1.4 million pigs annually at barns in Manitoba and operates a processing plant in Neepawa, Man.
“This investment is concluded upon understanding that Hylife’s expansion strategy … prioritizes (the) markets of Japan and Asia,” Itochu said in a statement.
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“The sales of Hylife’s safe, secure pork will be increased with Itochu’s marketing network in the Asian market with a focus on China, where consumption continues to grow.”
Hylife chief executive officer Grant Lazaruk said the Japanese investment is great news for Manitoba’s pork industry, particularly after 2012, when producers lost millions as feed costs reached record levels.
Manitoba Pork Council chair Karl Kynoch said the Itochu investment should help Hylife penetrate Asian markets for pork.
In turn, an increase in market access should trickle down to Manitoba’s hog producers.
“We look at (this) as very positive, as strengthening Hylife’s position in the world market and getting stronger access to the Japanese market,” he said. “Hopefully … it will turn into more dollars for the producer and a more stable industry here.”
Lazaruk also emphasized the word “stable,” noting the deal probably won’t increase hog production in Manitoba.
“I wouldn’t focus on expansion on hog production as being a part of this,” Lazaruk said from Hylife’s head office in La Broquerie, Man.
“I think we’re going to start to stabilize.”
Hylife said current shareholders and management would retain control of the company.
Itochu had revenues of more than $50 billion last year, operates 125 offices in 66 countries and trades in textiles, machinery, metals, minerals, energy, chemicals and food.
Hylife started focusing on opportunities in Asia after buying Springhill Farms’ slaughter plant in Neepawa in 2008. Lazaruk said managers developed business relationships in Japan and China over the last four years, which led to the deal with Itochu.
“We have an office in Shanghai,” he said. “We’re in China already and that’s why we’re complementary to Itochu…. We also have (pig) genetics. We sell genetics in China. We’ve established farms and genetic network for pigs in China.”
Seventy percent of Hylife’s pork is exported, and its biggest customers are Japan, China and Russia.
Hylife employs 1,550 people, including 900 at its Neepawa plant, processing about 28,000 hogs a week.
