Pork and poultry packer Olymel is preparing to permanently shut two further-processing facilities and shift their work to other plants in a new round of consolidation.
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.
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“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
