Meat packer Olymel has a “partnership” pact in hand with a competing Quebec pork player for joint operation of both companies’ hog slaughter and processing businesses.
Olymel, the pork and poultry arm of La Coop federee, announced an agreement in principle Wednesday with family-owned packer Atrahan Transformation, to start talks on “pooling our operations in the pork sector.”
The two companies said they expect to wrap up a partnership agreement by May, pending due diligence and any regulatory approvals, but won’t disclose any financial terms.
Atrahan, started by Achille and Gertrude Trahan in 1956, now operates a federally-inspected slaughter, boning and cutting plant at Yamachiche, in the Mauricie region about 20 km west of Trois-Rivieres.
The plant today is Quebec’s fourth-biggest pork packing facility, processing almost one million hogs per year. It employs about 350 people and exports pork to countries including the U.S., Hong Kong, Japan, Australia, Korea and Mexico, with annual sales of over $200 million.
Olymel’s pork operations, by comparison, have capacity to process up to 160,000 hogs per week, including slaughter plants in Quebec at Vallee-Jonction, St-Esprit and Princeville and one at Red Deer, Alta., along with six further-processing plants in Quebec and one in Ontario handling products such as hams, bacon and deli meats. The company booked combined pork and poultry sales of $2.4 billion in 2013.
Olymel and Atrahan said a deal, when sealed, will give both companies access to “additional supply volumes… to better meet the demands of their Québec, Canadian and foreign markets” and lead to “profitable synergies.”
The two companies emphasized the Yamachiche plant will remain in business at full staff, supplying Atrahan’s current customers and meeting its obligations under the provincial Hog Marketing Agreement, as negotiated between packers and the Eleveurs de porcs du Quebec.
“I am confident that, thanks to this partnership, the company in which the Trahan family has invested energy and passion for nearly 60 years will continue to grow,” Atrahan president Denis Trahan said in the companies’ release Wednesday.
“I also believe that our employees, suppliers and customers will be the first to benefit from the positive effects of this business partnership.”
Olymel CEO Rejean Nadeau, in the same release, said a deal will “strengthen our leadership position in the Canadian agri-food industry and also enable (Atrahan) owners and employees… to enjoy the benefits of this alliance.” — AGCanada.com Network