Restructuring and downsizing at Olymel, the main producer of fresh pork in Quebec, continues, as the closure of the Vallée-Jonction plant, the fifth to occur in a few months, is announced.
A total of 994 jobs will be affected by the measure.
This news comes the day after the announcement of $65.2 million in financial assistance to pork producers by the Financière agricole du Québec under the Farm Income Stabilization Insurance Program.
There will remain in the province only three slaughterhouses under Olymel, namely those of Ange-Gardien, in Montérégie, Yamachiche, in Mauricie, and Saint-Esprit, in Lanaudière, establishments that had object of recent investments.
The cooperative had acquired the first in 2019 by swallowing the Gardange-based company F. Ménard. Monday, at the regular meeting of the municipal council of Ange-Gardien, the elected officials gave their approval to a request from Olymel to increase its water consumption, a sign that the activities taking place in the installation were not slowing down.
The Yamachiche plant had undergone an expansion and investments of more than $110 million between 2017 and 2019.
Finally, $25 million was injected in 2016 to expand the Saint-Esprit facilities, which created some 200 additional jobs.
other closures
Last month, the pork giant announced the closure of its plants in Blainville and Laval for April 28. About 170 jobs will disappear when the key is put in the door at the end of the month. Employees were also able to be relocated to other company facilities.
The production of hams, pâtés and cured meats that used to take place there was gradually transferred to other factories in the group.
Last fall, Olymel also announced that the Saint-Hyacinthe and Henryville plants, which had 107 and 29 employees respectively, would also cease operations in the following weeks.
The plant closures are part of the reorganization of the cooperative that began in 2021. Olymel management wanted to reduce its operating costs and generate efficiency gains by repatriating the activities of certain plants to other other establishments of the company.
In October, the Quebec pork giant also announced a reorganization of its management staff. Some 120 vacant posts and 57 occupied posts have been abolished.
“Major challenges” in the pork sector
During the presentation of its 2022 financial statements, the senior management of Sollio, the main shareholder of Olymel, had reported on the “major challenges” experienced in the pork sector and which were partly responsible for the losses recorded by the cooperative.
These challenges concerned the devaluation of intangible assets, the COVID-19 pandemic, rising costs due to inflation, labor shortages and a four-month strike at its Vallée-Jonction plant.
Disruptions in the supply chain and the closure of the market in China — one of the largest importers of pork — during the first three quarters of the fiscal year also caused spoilers. Olymel’s pork division was also the one that suffered the most, but this trend is observable all over the world with a downward rebalancing ranging from 5 to 8%, it was specified.
In doing so, Sollio had to adopt a recovery strategy that involves a decrease in the number of slaughtered pigs and an increase in the processing of pork products, a favorable transition with the reopening of restaurants. This resulted, among other things, in a conversion of the Princeville plant, in the spring of 2022, and the call for temporary foreign workers.
The pork giant had also communicated its intention to reduce its annual slaughter of pigs by 20%, which represents approximately one million animals, starting in June.
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This dispatch was produced with the financial assistance of the Meta Exchange and The Canadian Press for the news.