Manitoba pork giant HyLife Foods will soon have someone else calling the shots.
The company announced a deal with Thailand-based exporter Charoen Pokphand Foods Public Company Limited (CPF) for 50.1 of the company’s stock April 22. The $498-million deal adds HyLife to the conglomerate’s list of companies, which span 17 countries and include hogs, chickens, ducks, livestock feed, aquaculture and restaurants, Reuters reported.
Why it matters: One of Manitoba’s major pork producers and processors is joining one of Thailand’s biggest names in agriculture.
That’s in addition to a 2012 deal which saw Japanese company Itochu Corp. acquire more than 30 per cent of the company. In CFP’s release announcing the deal it said Itochu would now own the remaining portion of the company.
HyLife president Claude Veilfaure touted the deal as a good fit for CPF and the company he runs.
“It is the third-biggest pork producer in the world and it is a family-owned company,” HyLife president Claude Vielfaure said.
“Their values are extremely strong, community based, employee based, very similar to the culture of HyLife,” he said.
Both companies are vertically integrated, with the interests ranging from feed to breeding, animal production and meat processing.
There are no plans to shift processing focus away from Neepawa due to the deal, Vielfaure said, and the plant in western Manitoba will remain the centre of the company’s processing.
The Neepawa plant completed a round of renovations last year which doubled cutting floor room, added advancements such as an overhead conveyor deboning system and water jet cutter and came as the latest in a line of expansion projects, ranging from new barns to new feed mills.
“We’ve invested heavily in Manitoba through the years, opening our new cut floor and $176-million investment in Neepawa, Manitoba, over the last number of years,” Vielfaure said. “That is certainly one component of why this company is investing in us, our world-class facility that we already have in Manitoba.”
HyLife currently owns processing facilities in both Canada and Mexico.
Vielfaure did not outline any further expansion projects in Western Canada, but said the deal was made in expectation of HyLife’s continued growth in North America.
CPF, meanwhile, has said that the acquisition will expand its footprint in markets like Japan and North America, Reuters reported.
HyLife CEO Grant Lazaruk called the deal a “win win” for both companies, as well as Manitoba’s agriculture sector.
HyLife Foods expects to expand its own export reach through the deal. The company already exports heavily to markets like Japan and China.
“With CPF based out of Thailand and all of its connections and its ownership in different companies around the world, certainly (that) will open doors for us,” Vielfaure said.
An April 22 release said that CPF exports to 30 countries for a reach of four billion people.
“Through this agreement, we will build on the success of our growing pork business and brands to our customers globally, including our fresh chilled pork products to Japan which we proudly grow and process right here in Manitoba,” Lazaruk said.
The deal has been in the works since late summer 2018, according to the president of HyLife Foods. The companies expect the deal will clear international regulatory authorities and close by the third quarter in 2019.