A planned expansion at the HyLife pork-processing plant in Neepawa is good news for the entire hog sector.
HyLife is planning a major expansion of the company’s finishing and processing capacities, a move made necessary by strong demand for its products, the company says.
We produce a great product and consumers want to buy it, Claude Veilfaure, president of HyLife said. “Because of that, our demand has increased significantly and now we need to create more product to maintain that momentum. This is a positive story for our industry. We are growing and thriving and bringing more demand for pigs.”
Manitoba Pork chair George Matheson says, despite HyLife producing many of the hogs it processes, this expansion will still have a number of positive repercussions for the Manitoba pork industry.
“This is really positive news for the pork industry in Manitoba,” Matheson said. “Although HyLife is a vertically integrated company, it produces about 80 per cent of its hog production so, there is still room for 20 per cent of its production to come from independent producers in the province.”
The additional production from HyLife will also increase the company’s contribution to the Manitoba Pork production levy, which benefits the sector’s research, consumer marketing and education and supports the provincial organization’s commitment to the National Pork Council.
“If you produce a pig in Manitoba you have an 80 cent levy to pay to the Manitoba Pork Council, so, say HyLife is producing just over one million hogs a year, it may well supply approximately $1 million to the Manitoba Pork Council’s $4.1-million budget,” Matheson said. “So this expansion will mean more revenues for Manitoba Pork. It really is a win-win situation.”
HyLife says the bill for the expansion will total about $125 million and will concentrate on modernizing and enlarging its productive capacity.
The expansion will include a dramatic increase in square footage at the company’s Neepawa packaging plant, something Vielfaure says will address growing congestion in the company’s distribution, chill cooler and cut floor space.
“In the Neepawa plant we want to improve our processes, put some technology and innovation into the plant, so a mechanization machine, and also increase the footprint of the plant by 130,000 square feet,” Vielfaure said.
The expansion will also allow HyLife’s Neepawa plant to launch into a full double shift that will create 165 new jobs, bringing the company’s total number of employees to 2,000.
“We are looking to increase to a full double shift, so about 15 per cent capacity growth to our plant, which will help us to have more and even better product,” Vielfaure said.
The investment will allow the company to adopt innovative technologies that will improve yields, processes, increase product shelf life, and allow pig production that had previously been outsourced to the U.S. to be finished and processed in Manitoba.
Plans also include construction of new finishing barns and a feed mill, which they’re hoping to begin building sometime this fall. Right now the company is working to find a suitable location somewhere in southern Manitoba.
HyLife began operating in the province in 1994 under the name VL4/Janzen in La Broquerie.
In 2008, it took over the Springhill Farms pork-packing plant in Neepawa and then rebranded from Hytek to HyLife in 2011.
Vielfaure says continued growth and expansion of the company has always been a part of the plan.
“Our business plan is completely about growth. The Neepawa plant, when we bought it had 300 employees in 2008, and now we are around 1,200 employees in Neepawa, so there has already been a significant growth over the years and now this is just the next phase, or next step of continuing to grow our company,” Vielfaure said.
The expansion has been highly driven by HyLife’s continued success and growth in a number of international markets.
As a federally inspected packing plant, HyLife is approved to ship to the U.S., Russia, Mexico, Australia, Brazil, South Africa, Peru, Vietnam and Ukraine, but the company has seen the most success exporting to Asian markets.
“Our company has grown significantly over the years since we bought the processing plant in 2008. We have decided to sell meat all over the world but especially in Japan and China,” Vielfaure said.
HyLife is Canada’s largest exporter of fresh chilled pork in Japan, selling approximately $200 million annually.
“Our Japan market has really taken off. Our product is very well accepted there and has grown to the point where the demand has outgrown the supply,” Vielfaure said.
HyLife also owns part of a Japanese food-processing giant, Itochu, and recently opened its first restaurant in Daikayama, Tokyo, to help promote the brand and build consumer loyalty.
“The restaurant is really about branding our name. It is about having a presence in Japan and giving the consumer a chance to have an experience with the product,” Vielfaure said. “This is something we are trying in Tokyo and if the strategy works we may look at similar options in other markets.”
The company has seen similar demand for its product in China. It broke into the Chinese market in 2008 and has since established a local office.
“We have been in China for many years and we actually have a sales office in Shanghai. We are selling about $80 million Canadian of pork a year in the Chinese market,” Vielfaure said.
In September, HyLife was one of the 56 new business contracts between Canadian and Chinese companies announced by Prime Minister Justin Trudeau, which together hold an estimated worth of $1.2 billion.
HyLife has agreed to a product proposal and contract terms with JD.com, one of China’s largest business-to-consumer online retailers.
JD.com will market premium Canadian pork products on the company’s e-commerce platform. Currently, more than 280 million people buy products through JD.com.
Revenues from the site sales are expected to reach $6 million until the end of 2018.
“Through JD.com consumers will be able to buy 500-gram packs of branded HyLife pork online and have them delivered to their door,” Vielfaure said. “This is really just another avenue to be able to brand our product.”
Vielfaure says the Asian markets have been pivotal to HyLife’s success, as well as the success of the Canadian hog industry, because they allow the company to market and sell all parts of the harvested pig, including a lot of products that are not sold in Canada, such as hind feet, hocks, heads and backbones.
In November of 2015, HyLife also made progress in the Mexican marketplace, establishing a joint venture there to process hams at a small processing plant, Apaseo Ham.
The plant employs 100 workers who remove skin and debone Manitoba ham for the Mexican market.
Matheson says HyLife’s growing popularity overseas bodes well for Manitoba’s image and reputation.
“If HyLife is able to brand Canadian and Manitoba pork and build a relationship with international consumers who recognize and have a desire for it, that can only mean good things for Manitoba producers,” Matheson said.