October 15, 2007

 

Canada's Hytek abandons plans for new pork plant

 

 

Hytek Ltd., one of Canada's largest hog producers, has given up on building a new slaughter plant in Winnipeg, Manitoba, and would purchase a smaller 20-year-old plant, a spokesman said on Friday.

 

The company has an agreement to buy the Springhill Farms plant in Neepawa, Manitoba, for an undisclosed price, Guy Baudry, a spokesman from the company said. The deal should close in January, he said.

 

Hytek, which has boosted production by more than 25 percent this year to a total of more than 1.5 million hogs, wants to export fewer hogs across the US border.

 

Baudry said the company could stay competitive if the hogs could be raised and processed locally and exported to the US.

 

Two years ago, Hytek had plans to build a CAN$200 million (US$205 million) plant with partner companies. The plant would have been able to process 45,000 hogs per week.

 

However, residents near the site protested, and the plan lost political support.

 

Last December, Hytek lost its partners in the project: Quebec-based Olymel LP, one of Canada's largest meat processors, and Saskatchewan producer Big Sky Farms.

 

These meant Hytek had to look for alternatives, Baudry said.

 

Hytek will spend CAN $35 million to improve the Springhill plant, so that it can slaughter its capacity of 4,000 hogs per day, up from current levels around 3,400 per day, he said.

 

The company also plans to further-process more of the carcasses into meat for export sales, Baudry said.

 

Canada's pork industry has suffered in recent years because of the strong Canadian dollar and higher feed costs.

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