Reuters — Quebec-based La Coop Federee, one of Canada’s biggest farmer co-operatives, is offering for sale up to 49 per cent of pork processor Olymel, to help fund expansion in Western Canada, CEO Gaetan Desroches said in an interview.
La Co-op would retain control of Olymel, which along with Maple Leaf Foods is one of Canada’s two big pork processors.
The co-operative, which had $6 billion in revenue for the year ending Oct. 31, 2015, plans to expand hog production in Western Canada to increase processing at its Olymel slaughter plant at Red Deer, Alta., and is also hunting for partners in farm supply stores, he said.
The CEO said La Coop plans to spend $300 million over five years on expanding hog production and investing in stores.
Selling a large stake in Olymel would help fund the expansion, which is aimed at competing with U.S. packers such as Tyson Foods and Hormel Foods, Desroches said.
“The goal we have is to increase the chain’s value,” he said. “It’s a coordination of every step in production to the customer.”
Olymel had revenues of $2.8 billion last year.
Desroches said La Coop wants a strategic partner, another company already in the hog business, in Olymel.
He declined to say how much interest he has received.
La Co-op has no plans to change its structure, including any initial public offering, Desroches said.
–– Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.