(Longueuil) Agropur is not trying to circumvent the rules of the free trade agreement with the United States and Mexico by changing the recipe for skim milk powder sold in the United States, assures the CEO of the dairy cooperative, Émile Cordeau.
Posted at 5:04 p.m.
The leader was reacting to comments made by the president of the cooperative, Roger Massicotte, during a virtual presentation in December, the content of which was fanned by the specialized media agricultural life.
Mr. Massicotte had said that this mixture, which he calls “the blend”, made it possible not to display the product as skimmed milk, subject to quotas. “It’s a mix that the Americans showed us how to do,” he said. They mix in other things and it’s not called dairy product anymore. We mixed other things with it and exported those products, but that doesn’t mean we won’t be blamed by the Americans. »
Agropur is “fully compliant” with the standards of the Canada-United States-Mexico Agreement (CUSMA), replied Mr. Cordeau, in an interview with The Canadian Press, on the sidelines of the 83and annual general meeting of the dairy cooperative.
Management would not have had the choice of “turning around on a dime” to deal with the more severe quotas of the CUSMA, which came into effect in 2020. “It is certain that the agreement has caused a change in operating model. We had no choice but to adapt. We’ve been in dairy ingredients for decades. So we dipped into our product portfolio. We had recipes, solutions that existed. »
Mr. Cordeau did not want to say what was in the recipe of the “blend” for competitive reasons.
Agropur wants to stay in Longueuil
Regardless of whether it decides to sell its head office in Longueuil, Agropur intends to keep physical offices in the region, assures Émile Cordeau.
“It is certain, if we sell, we will try to move not far from the office, he said. Most of our members are in Quebec and we intend to stay here, there is no doubt. »
Management had no intention of selling the head office inaugurated in 2016, but which had become too large in a context of massive adoption of teleworking, nuance the manager. The initial plan was to lease 50% of the area and occupy the other half of the building, valued at 94 million by the City of Longueuil.
PHOTO MARTIN TREMBLAY, PRESS ARCHIVES
Agropur’s head office
One of the visitors made an unsolicited purchase offer, says Mr. Cordeau. “It is too early in the process to say if we will sell it. The decision has not been made. We are evaluating the offer. »
When possible, Agropur intends to adopt a hybrid model, where the schedule will be split 50/50 between face-to-face and telework. To help its employees adjust to the transition, the employer will give them more time than the deadline for the end of mandatory teleworking on February 28. “We are really going there gradually. Leave a few weeks to absorb. We come back to a day, then after that we will arrive at 50%. It should be done this winter, I hope, or in the spring. »
In a better financial situation
Agropur has made an “excellent part of the way” in improving its financial results and its balance sheet, welcomes Mr. Cordeau, who took office in October 2019.
The leader has achieved two financial objectives that he had set for himself: to reduce the cooperative’s indebtedness and improve its profitability.
In 18 months, Agropur’s debt has been reduced by $1.1 billion, or 45%, to reach $1.3 billion. The ratio of overall debt to earnings before interest, taxes and amortization (EBITDA) thus fell from 6.3 times to 3.3 times.
The EBITDA margin is also up slightly in 2021 compared to 2020, rising from 6% to 6.4%. This figure was 5% in 2019.
Mr. Cordeau points out that “business for business” activities are growing. This segment, which includes private labels, packaging, sales to hotels and restaurants, represents three quarters of its activities.
For declining product categories, such as fluid milk, Agropur will focus on new “value-added” products to boost sales. He gives the example of Natrel Plus lactose-free milk, which contains more protein. This type of product opens “a growth channel” to adapt to the “global trend” of declining milk, he explains.