Sollio Cooperative Group held its annual general meeting on Feb. 26.

The group saw consolidated sales of $8.4 billion and $562.3 million in adjusted earnings before interest, taxes, depreciation and amortization. Earnings before patronage refunds and income taxes were $211.9 million for the fiscal year compared to $129.5 million in 2024.

Sollio pledged to return $75 million to members of its co-operative network in dividends and share redemptions. This compares to $25 million in 2024, which was the first year it paid patronage refunds since 2020.

Sollio Agriculture saw sales of $2.56 billion. It attributed strong results to performance in its crop production and livestock production sectors.

Sollio Retail (BMR) saw sales of $968.2 million with a better-than-average financial performance attributed to “strict management,” the news release said.

The co-operative has bounced back in the last few years after booking deep losses in 2022 which occurred largely in its Olymel food division. It attributed its losses that year to lack of labour and high grain, transportation and labour costs. In 2023, Olymel dialed back pork production in Alberta and Saskatchewan and closed processing plants in Quebec and Ontario.

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The $142 million upgrade of the La Fernandière site in Trois-Rivières will increase capacity to process more pork and poultry products. Products will also be fully processed and packaged on site.

Modernization of operations at the site will also allow Olymel to use the latest packaging technology and will improve ergonomics for workers, the company said.

Olymel will permanently close its Anjou and Cap-de-la-Madeleine facilities in spring of 2026. The 290 employees from those sites will be offered jobs in neighbouring Olymel plants, the company said.

Olymel acquired the Trois-Rivières site in 2016 when it absorbed Quebec sausage maker La Fernandière. At the time it planned to invest $1.5 million in new equipment and to triple production at the plant.

Earlier this year, Olymel parent company Sollio Cooperative Group announced 2024 had been one its best years in decades after deep losses in 2022. In 2023, Olymel dialed back hog production in Alberta and Saskatchewan and shuttered several processing plants in Ontario and Quebec.

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“The effects of our recovery plan are accelerating,” said Pascal Houle, CEO of Sollio Cooperative Group in a news release Feb. 27.

“We’ve strengthened our financial position, boosted our operational performance, and improved our profitability. We can be pleased with our progress, but we can’t let our guard down. We need to be laser-focused on financial stability as the key to sustainable, long-term growth.”

The co-operative will pay out $25 million in patronage refunds and dividends. It last paid patronage refunds in 2020.

Last year, Sollio returned to profitability after booking deep losses in 2022, which it attributed largely to its food division — meat processor Olymel. In 2023 Olymel dialed back hog production in Alberta and Saskatchewan and several processing plants in Ontario and Quebec, including Vallée-Jonction, Sainte-Hyacinthe and Princeville.

Lack of available labour and higher grain, labour and transportation costs were all cited as contributing to losses in 2022.

Olymel pork performance improves

Sollio called 2024 a “pivotal year” for Olymel. Net earnings reached $196.9 million, up nearly 39 per cent on the previous year.

“The year was thus marked by excellent results in pork production, helped by lower grain prices, and hence lower feeding costs,” the company said in the news release.

Fresh pork saw improved performance “thanks to operational optimization initiatives,” new customers and products.

The company’s eastern pork sector remains in a deficit, Sollio said. The devaluation of the Japanese yen was an aggravating factor.

Chilled pork product sales saw gains. In its annual report, Sollio said these value-added products are in high demand in domestic and Asian markets.

In 2024, Olymel slaughtered 6.3 million hogs, down 0.8 million from 2023 on the closure of the Vallée-Jonction slaughterhouse and closure of breeding facilities in Western Canada.

Poultry performance ‘satisfactory’

Sollio called Olymel’s poultry performance “satisfactory” despite difficult market conditions. Volumes were higher than 2023, but selling prices declined. Some turkey operations saw “a significant net loss,” the company said in its annual report, citing lower consumption in Canada and around the world which led to a market surplus.

Further processed poultry saw greater profit margins as a percentage of sales, but lower volumes led to decreased revenues.

“As with further processed pork, the difficult year in the restaurant industry impacted our results,” the company said.

A fire at Olymel’s Oakville plant in late 2024 added logistical challenges.

Sollio agriculture posts loss

Sollio agriculture posted a net loss of $3.9 million, including a loss of $3.1 million from discontinued operations.

Sales reached $2.51 billion, for a decrease of 11.7 per cent year-over-year. The company pointed to lower commodity prices and its exit from direct grain merchandizing opportunities as reasons for the decline.

However, the division saw its EBIDTA (earnings before interest, taxes, depreciation and amortization) grow based on strong performances from poultry breeding farms and hatcheries, an uptick in crops and gains on feed mill ingredients.

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“This decision comes against a backdrop of falling production volumes, which has led the plant to operate at only 40% of its operational capacity,” the company said in an April 19 news release.

Operations at the plant will be “redeployed” to other Olymel facilities.

The closure will affect 135 employees, including 30 temporary foreign workers. The company said workers would be given the option to relocate to neighbouring plants.

Olymel has seen a spate of losses in recent years. It dialed back hog production in Alberta and Saskatchewan last year, and closed several processing plants in Ontario and Quebec, including at Vallee-Jonction, Sainte-Hyacinthe and Princeville.

Earlier this year, Olymel’s parent company, Sollio Cooperative Group, said it was back in the black after 2023’s losses, with Olymel posting a surplus of $138.3 million after a loss of $446.1 million in 2022.

The company said it achieved this via improved performance in fresh pork, reduced slaughter volume, consolidating plants and distribution centres, disposing of “non-strategic assets,” recruiting foreign workers to offset local labour shortages and focusing on value-added products.

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“Not only have we restored profitability, but the trend we see for the coming years is encouraging,” said Pascale Houle, Sollio’s CEO in a Feb. 29 news release.

Sollio’s food division, Olymel, saw the greatest turnaround in 2023, the company said. It ended the year with a surplus of $138.3 million after a loss of $446.1 million in 2022.

The company said it achieved this via improved performance in fresh pork, reduced slaughter volume, consolidating plants and distribution centres, disposing of “non-strategic assets,” recruiting foreign workers to offset local labour shortages and focusing on value-added products.

Resumption of exports in some markets also boosted profits, the company said in the news release.

In 2023, Olymel dialed back hog production in Alberta and Saskatchewan and shuttered several processing plants in Ontario and Quebec, including at Vallee-Jonction, Sainte-Hyacinthe and Princeville.

Sollio’s annual report indicated that the number of hogs slaughtered declined, as did market share in Quebec.

The company said it saw sales of about $4.71 billion in 2023, up from $4.60 billion in 2022, it said in its annual report.

Exports to China decreased, due to more value-added production, the report said. Volumes of chilled pork shipped to Japan declined slightly as well.

“The launch of these same products in Canada was a great success,” the report said.

In the west, the company said it benefited from full access to the Chinese market. This partially explained an increase in sales, it said.

Sollio reported record profits in its bacon sector, and a decline in its poultry sector.

Olymel’s market share for turkey declined in 2023, the report said. Bird quality has been an issue, the company said, including with cysts in male birds.

“It appears that the production volumes in 2024 will have a negative effect on our results, amid increased imports of turkey meat from Chile,” the annual report said.

Further processed poultry produced higher margins in 2023 compared to 2022, with higher selling prices offsetting lower volumes sold.

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“With our refreshed strategic Blueprint announced today, we are sharpening our execution focus… aligning the talents of our team to leverage the strength of our portfolio of leading brands, leadership in sustainability and world-class assets,” said Curtis Frank, president and CEO of Maple Leaf Foods Inc., in a news release.

Maple Leaf released its fourth quarter financial results on Feb. 22. Over 2023, its meat protein group’s sales increased about three per cent to $4.74 billion.

However, in Q4, sales didn’t meet expectations “as a result of global pork market dislocations that have persisted longer and deeper than we anticipated, and a challenging consumer demand environment,” Frank said in the news release.

“Plus we still have a short distance to go to bring home the full benefits from our London Poultry and Bacon Centre of Excellence projects,” he said.

At the end of 2023, the meat protein group had an adjusted EBITDA of $463 million, up 22.3 per cent from 2022.

The plant protein group saw sales of $147 million, down just over 13 per cent from 2022.

“The sales decline was driven by lower volumes in retail and foodservice products, partially offset by pricing action implemented in prior quarters to mitigate inflation,” Maple Leaf said in its 2023 annual report.

The plant division’s end-of-year EBITDA was a loss of $32.9 million compared with a $105.4 million loss in 2022. The company said this improvement came on reduction of startup expenses, higher pricing and “operational improvements.”

In an emailed statement, a spokesperson for Maple Leaf said the plant-based business had performed well in Q4, posting a positive adjusted EBITDA of $0.1 million ($100,000).

Meat processors struggled in 2023, with Olymel dialing back hog production in Alberta and Saskatchewan early in the year, and closing processing plants in Ontario and Quebec.

“Over the past two years it is well documented that Olymel has experienced significant losses in the processing of fresh pork as a result of limited market access globally,” Olymel CEO Yanick Gervais said May 2023.

“Now, coupled with stubbornly high feed costs, resulting in unprecedent losses in the hog sector, we have little choice but to retract and position ourselves for success in the future when conditions improve.”

Manitoba-based Hylife Foods shuttered its Windom, Minnesota plant at the beginning of June, and laid off a handful of mainly administrative workers in Manitoba, citing “current global condition.”

In the plant protein space, Nourish Marketing noted in its 2024 trend report that while consumer curiosity drove the first wave of plant-based meat analogues, most consumers “will not pay a price comparable to meat for a product they view as a disappointing alternative to the real thing” while vegans and vegetarians drive only a small portion of sales.

Nourish predicted a consolidation of products in that space and a turn toward more plant-forward options.

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Olymel, the meat packing arm of Quebec’s Sollio Cooperative, announced Wednesday it will permanently close its pork boning and packaging plant at Princeville, Que. effective Nov. 10, and its poultry processing plant at Paris, Ont. effective Dec. 22, affecting 301 and 93 jobs respectively.

One of two production lines from the Paris plant will be installed at the company’s processing plant at Oakville, Ont., about 75 km northeast of Paris, as part of an $8 million package of upgrades. Equipment from the Paris site will also be moved to an Olymel further processing plant at Sainte-Rosalie, Que., just east of Saint-Hyacinthe.

“The decision to close the Paris plant definitively was much thought-over, and the choice to consolidate the Paris operations with those in Oakville was taken to ensure efficiency and cost savings,” Olymel CEO Yannick Gervais said in a release Wednesday.

“This decision will prevent the projected costly investments needed to update the company’s equipment at the Paris plant, notably to eliminate noise and odour disturbances for the neighbourhood.”

The renovations at Oakville, meanwhile, are expected to add 62 processing jobs at that plant, Olymel said in a release. Employees from the Paris plant will be offered relocation to Oakville or to other Olymel poultry plants at Port Colborne and Brampton, Ont.

Further-processing work such as tumbling at the company’s Orenda Road plant at Brampton are also expected to get a boost from the upgrades at Oakville, Olymel said.

Olymel has owned the Paris, Oakville and Port Colborne plants since 2018, when it bought Ontario chicken processor Pinty’s Delicious Foods.

‘Rethink’

As for the Princeville closure, Gervais said the company had “explored various avenues” for the pork processing facility but found its operations could be handled instead at Olymel’s other pork slaughter, cutting and boning plants in Quebec, namely at St-Esprit, Yamachiche and Ange-Gardien.

A relocation plan will also be offered to the Princeville plant’s employees to shift to other fresh pork plants or “any other facility with labour needs.” The closure also affects 33 temporary foreign workers (TFWs), Olymel said, adding it plans to work with federal and provincial authorities to allow those workers to apply to relocate to other Olymel sites.

The site at Princeville, about 80 km east of Trois-Rivieres, had already been shifted from hog slaughter and cutting work to value-added processing in March last year. Olymel said Wednesday it will announce plans for disposition of that plant and land at “a later date.”

“Today more than ever, it is necessary to continue to rethink our organization in order to optimize all of our activities,” Gervais said of the Princeville closure in a separate release. “The fresh pork industry is slowly getting back on track after two years of tumult that forced us to reorganize our operations.”

The “difficult but necessary” decision to shut the Princeville plant “is part of Olymel’s desire to continue our efforts to return to profitability in the sector, for the benefit of our entire organization,” he said.

Olymel’s processing business at Princeville had also previously included a bacon facility, which burned down in 2012 and was not rebuilt.

Throughput

Olymel also said Wednesday it’s “accelerating” plans by over a year to close a distribution centre it operates at Saint-Simon, Que., about 12 km north of Sainte-Rosalie. That closure will now take effect Jan. 26, 2024.

The company said it announced in September last year it will sell its building and land at Saint-Simon to the municipality, which plans to redevelop the site for residential use.

The decision to reschedule the closure follows Olymel’s recent reductions in slaughter volumes, which led to a “decline” in throughput at the Saint-Simon site, and also considers the capacity of other Olymel distribution centres to handle those volumes.

In Sollio’s fiscal 2022, the Olymel division alone booked a loss, before income taxes, of $445.7 million for 2022, following a $71.8 million loss for 2021.

Olymel has already been in deep cost-cutting mode for about a year, including eliminating dozens of administrative and management positions last fall through attrition and layoffs and permanently closing three Quebec processing plants.

After announcing plans to reduce its total hog slaughter, Olymel said in April it will close its Vallee-Jonction, Que. slaughter plant by Dec. 22.

In May, Olymel said it will also dial back its company-owned sow herd in Western Canada, with plans to idle five sow units in Alberta and one in Saskatchewan.

That’s expected to translate to a production cut of about 200,000 market hogs per year. The resulting impact on operations at Olymel’s Red Deer, Alta. slaughter plant “will not be felt until 2024 at the earliest,” it said at the time. — Glacier FarmMedia Network

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Olymel announced Friday that CSN-represented workers at the Bacon Inter-America facility, who’d been on strike since May 26, voted 93.6 per cent in favour of the deal. The company said the agreement was proposed by provincial conciliator Diane Larouche.

Olymel said Friday the size of the vote in favour of the deal will allow for “a serene resumption of plant operations from the beginning of next week, after verification of the availability of the raw material” — that is, pork bellies.

The company also said it believes the improvements in the agreement “will be a positive factor for the work climate, as well as for hiring and retention of employees.”

The new agreement comes during a particularly unprofitable spell for Olymel, which has already been in deep cost-cutting mode for months. Last fall it cut dozens of administrative and management positions through attrition and layoffs.

Since then, the company has closed three pork further-processing plants in Quebec and has plans in place to shut its hog slaughter plant at Vallee-Jonction, Que. before the end of the year.

Further west, where Olymel operates a major hog slaughter plant at Red Deer, Alta., the company more recently announced plans to dial back its Prairie hog production by idling six company-owned sow units in Alberta and Saskatchewan starting sometime in the next several months.

The workers’ union local, the Syndicat des travailleuses et travailleurs de Bacon Inter-America–CSN, in a separate release Friday, said the deal gives the Drummondville plant’s 500-odd workers a $4.55 per hour wage increase over four years, including $1.75 an hour in the first year.

The deal also calls for a 9.6 per cent decrease in employee contributions to insurance, plus improvements to pensions, the union said.

Pascal Bastarache, president of the Conseil central du Coeur du Quebec–CSN, said in the union’s release that Olymel “had no choice” but to take inflation and shortages of available labour into account, adding that this deal represents “a signal for the other employers in the region.”

The union, in a separate release June 13, cited Scotiabank data showing the average retail price of bacon has risen by about 30 per cent between December 2019 and December 2022.

Melanie Cloutier, president of the Drummondville union, said the plant’s business is profitable, bacon is a growth market and the company “cannot put all of Olymel’s difficulties on us.” — Glacier FarmMedia Network

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Olymel, the agrifood arm of Quebec’s Sollio Cooperative Group, announced Friday it has served 80 employees with layoff notices at five sow units in Alberta and one in Saskatchewan.

The unit closures — Pinnacle 1 and 2, Dynacrest 1 and 2 and Smoky Sow/Dev in Alberta, and Olysky’s Kelsey unit in Saskatchewan — will reduce Olymel’s company-owned sow herd in Western Canada to 40,000 sows, down from 57,000, the company said.

That reduction is expected to translate to a net production cut of about 200,000 company-owned market hogs per year.

Olymel said the impact of that supply cut on operations at its hog slaughter plant at Red Deer, Alta. “will not be felt until 2024 at the earliest” and would depend partly on hog supply availability from independent producers.

The company didn’t give a hard date for the closures in its release Friday, but said the affected sow barns’ operations will be wound down “over the next several months” and the barns will stay closed “until market conditions improve.”

READ MORE: Meat industry hits hard times

“Over the past two years it is well documented that Olymel has experienced significant losses in the processing of fresh pork as a result of limited market access globally,” Olymel CEO Yanick Gervais said in Friday’s release.

“Now, coupled with stubbornly high feed costs, resulting in unprecedent losses in the hog sector, we have little choice but to retract and position ourselves for success in the future when conditions improve.”

Olymel’s fresh pork business in Western Canada took a hard hit in the company’s 2022 fiscal year, largely from “higher grain, labour and transportation costs, as well as the closure of the Chinese market in the first three quarters of the fiscal year for a second consecutive year.”

In Sollio’s fiscal 2022, its Olymel division alone booked a loss, before income taxes, of $445.7 million for 2022, following a $71.8 million loss for 2021.

Olymel had already been in deep cost-cutting mode for months. Last fall it cut dozens of administrative and management positions through attrition and layoffs, and since then has permanently closed three pork further-processing plants in Quebec.

After announcing it intended to reduce its total hog slaughter, Olymel last month reported it will permanently close its hog slaughter plant at Vallee-Jonction, Que. by Dec. 22.

Olymel and other packers operating in Quebec last month also announced a new supply deal with that province’s hog producer organization, les Eleveurs de porcs du Quebec.

To reduce the effects of the Vallee-Jonction plant’s closure on Quebec hog producers, EPQ said at the time, the new deal calls for Olymel specifically to cease buying market hogs from neighbouring Ontario.

Olymel’s remaining hog slaughter plants in Canada include the facility at Red Deer and its plants at Princeville, St-Esprit and Yamachiche, Que. — Glacier FarmMedia Network

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Olymel, the protein arm of Sollio Co-operative, announced Friday it will wind down operations at its hog slaughter, cutting and deboning plant at Vallee-Jonction, Que. and permanently close the facility by Dec. 22.

The decision affects 994 employees across two shifts per day, including 911 unionized workers and 83 managers, Olymel said. Of the 911, 122 are in Canada as temporary foreign workers (TFWs).

The decision follows reductions in Olymel’s total annual hog slaughter over the past 12 months by about 1.5 million hogs. By operating just three slaughter plants in Quebec, Olymel said it “will be in a better position” to reach a reduced weekly slaughter capacity of 81,000 hogs, down from 140,000.

“After carefully examining the difficult situation in the fresh pork sector and searching for the best way out of this crisis, it has become clear that closing one of Olymel’s four slaughtering, cutting and deboning plants in Quebec was inevitable,” CEO Yanick Gervais said in a release.

The decision followed an analysis of the four plants which “ultimately revealed the limitations of the Vallee-Jonction plant, given the steady decline in the available workforce and the condition of the facilities.”

The plant at Vallee-Jonction, about 60 km southeast of Quebec City, has operated since 1965 and has been part of the meats division of what’s now Sollio since 1975.

On a call Friday morning with reporters, Gervais said the plant has “some structural problems” and its cooling systems need fixing. The structural problems are nothing dangerous, he added.

The plant’s configuration also “limits technological improvements,” meaning it’s too tight to allow for installation of robots and other automation — a problem that’s not an issue at the three remaining slaughter plants. In all, the needed upgrades and repairs at Vallee-Jonction would require an outlay of almost $40 million in “the very short term.”

The company did cite a “constant decline in available labour” in the Beauce region, leaving Olymel unable to fill normal turnover-related vacancies at Vallee-Jonction, much less to create new jobs through value-added work. The three remaining plants are in areas with “better recruitment opportunities” for workers, Olymel said.

That said, Gervais emphasized the decision to close the plant was not “region-based” but rather mainly on the “current and potential future operational capacities” of the company’s plants.

To process remaining hogs and meet “producer demand” in the Beauce region and elsewhere, the plant’s closure will start in mid-September with the evening shift, affecting 443 workers. The day shift “should continue depending on supply and labour availability” until the plant “ceases operations completely” on Dec. 22.

Vallee-Jonction employees will be offered the option for “voluntary relocation” to one of six other Olymel plants, and the company has also “taken steps with federal and provincial authorities” to allow affected TFWs to apply for relocation to other Olymel sites.

“As if it weren’t insulting and violent enough to be treated this way, we are asked to stay on the job until the final closure,” Martin Maurice, president of the Syndicat des Travailleurs d’Olymel Vallee-Jonction, the local union backed by CSN (Confederation des syndicats nationaux), said Friday in a separate release.

‘Obstinate’

As for affected hog producers in Quebec, Gervais said a new three-year agreement between hog buyers/processors and Eleveurs de porc du Quebec “is being established,” with details to be announced next week.

Provincial Agriculture Minister Andre Lamontagne said Friday on Twitter that the plant closure is part of a difficult restructuring for Olymel — but also said news would come shortly to assure the pork sector’s sustainability.

Quebec’s hog farmers and packers have been in talks led by former provincial finance minister Raymond Bachand since last September, Gervais said Friday, adding that “both processors and producers have suffered from the consequences of the worst economic situation in our industry.”

Gervais emphasized it’s “important to remember the efforts made by both sides to support the sector, such as facilitating the processing of remaining hogs and making financial arrangements to reduce price pressures.”

Martin Caron, president of Quebec’s Union des producteurs agricoles (UPA), said in a separate statement Friday that Olymel’s announcement flies in the face of “the efforts, the investments and the sacrifices” of hog producers, who “deserve better, period.”

UPA on Friday called for the province and its agriculture ministry (MAPAQ) to step in and undertake a “neutral and independent” analysis of the current situation in the province’s pork sector, for the sake of industry stakeholders as well as the general public.

CSN president Caroline Senneville, in that union’s release, said the plant’s closure is “directly linked” to the failure of Bachand’s talks between Quebec’s producers and packers.

Alexandre Laviolette, president of CSN’s trade arm, said the closure stems from Olymel’s bad business decisions and the “obstinate stubbornness” of hog producers who didn’t want to have to continue to discount every hog delivered to the company’s plants.

Furthermore, he said, Quebec’s farm income stabilization program (ASRA) could have been used to support producers in a situation where neither party wanted to absorb expected losses.

Barbara Poirier, president for CSN’s Chaudière-Appalaches council, said that while meatpacking workers were regarded as heroes during the pandemic, they’re now about to be let go because of a dispute over how producers and packers could share market losses against which they were “fully insured.”

The plant’s CSN-represented workers in 2021 had ratified a six-year contract which otherwise was due to run through to March 2027. That contract followed a four-month strike which ended after the company threatened to scrap the plant’s evening shift.

‘Turnaround measures’

The COVID-19 pandemic, shortages of available labour, “instability of export markets” and rising raw material costs, among other conditions, have led to losses “which still have a major impact on Olymel,” the company said Friday, noting its subsequent reorganizations, plant closures, asset sales and reductions of hog purchases by over two million head from both Quebec and Ontario.

Gervais noted those “major turnaround measures” are “starting to show results” but the company is “still in the process of optimizing our operations to achieve a more predictable business model and ensure the sustainability of this sector of the business.”

Olymel’s remaining hog slaughter plants in Canada include its Quebec sites at Princeville, St-Esprit and Yamachiche, plus its western hog plant at Red Deer, Alta.

“Significant volatility” remains in the fresh pork sector and the “business risk is high,” Gervais said. “We need to protect our value-added export markets, such as Japan and Korea, as well as our domestic fresh and processed meat activities.”

The Vallee-Jonction plant, which has a weekly slaughtering capacity of up to 35,000 hogs, makes boned pork products, various cuts and chilled pork, with “a large part” of that volume exported to Japan, the U.S. and Mexico.

As for the Vallee-Jonction building itself, Olymel said Friday it will “assess all of its options and… consider any proposals from interested parties.” — Glacier FarmMedia Network

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