December 5, 2006


Canada's Olymel to close two Quebec pork plants


Canadian meat processor Olymel LP would close two pork processing plants east of Montreal next spring, as high costs and a strong Canadian dollar continues to strangle the Canadian meat industry.


Olymel, a company with operations in Quebec, Ontario and Alberta, has already hired former premier Lucien Bouchard to help restructure the troubled industry.


The company said Monday that a plant at St-Valerien-de-Milton that has 153 employees and another at St-Simon-de-Bagot with 406 employees would be closed at the end of March.


Olymel had announced the closure of the St-Simon-de-Bagot plant, earlier this year but the union fought to keep it open through lawsuits. The plant, originally meant to be closed in September, would now be shut in March, a spokesman said.


Disgruntled workers at the St-Valerien plant said it would not have been targeted except to legally justify the St-Simon closure.


Workers at St-Valerien were surprised by the closure because Olymel had not asked for wage concessions from employees, as is often the case when a plant is losing money.


Olymel recently said about 4,000 of its jobs in Quebec are at risk in the fresh-pork sector if there is no improvement shown in production, marketing, slaughtering and processing conditions.


The company is expected to have sales of US$2.5 billion this year.


About half the company's production is exported internationally and Olymel has been hurt by the appreciation of the Canadian dollar, which makes exports more expensive.


Earlier this fall, Maple Leaf Foods Inc, a Toronto-based food processor, announced its exit from the fresh pork international markets and cancelled plans for a pork plant in Saskatoon. The company also said it would sell its animal feed business.


Olymel accounts for 60 percent of Quebec pork production and employs 11,000 people at plants in Quebec, Ontario and Alberta.

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