September 29, 2006

Canadian pork processor raises rallying cry for a return to profitability

Quebec pork processor Olymel is calling for an industry-wide soul searching in Quebec which it hopes would bring the ailing industry back to long-term profitability.

Olymel, which represents almost 60 percent of the Qu¨¦bec market, has been suffering from the seemingly unstoppable rise of the Canadian dollar, which has slashed the company's profit margins. Other negative factors include unstable hog deliveries and labour costs.

The problems of the industry for the past two years have resulted in losses of more than CAN$100 million (US$90 million), and Olymel said losses so far this year may reach as high as CAN$55 million (US$50 million).

To salvage the situation, the company has brought in the former Premier of Quebec, Lucien Bouchard, to conduct negotiations with the company's partners.

Through dialogue with the leaders in the industry, Olymel intends to find measures to long-term profitability for the region's pork.

Olymel said that almost 4,000 jobs would be put at risk in its own company if nothing is done to improve market conditions.

Olymel engaged former Quebec premier Bouchard, now a partner in Davies Ward Phillips and Vineberg, a business law firm, to conduct negotiations to find lasting solutions to the problem at hand.

Bouchard would seek to consolidate and co-ordinate the opinions and action-plans of major organisations in the industry, trade unions and government representatives.

Bringing together the industry to seek solutions is a vital necessity for Olymel and for the whole of the sector, said R¨¦jean Nadeau, president and chief executive officer of Olymel.