Pork and poultry packer Olymel is set to close the further processing plant it operates in its home town in Quebec as it exits the lard production business.
The company, an arm of ag co-operative Sollio, announced Thursday it will close its St. Jacques Street plant at St. Hyacinthe, Que. effective Feb. 10, affecting 107 employees.
The plant, which previously focused on ham deboning, still handled some processing and frozen food storage, but most of its operations since 2017 have focused on rendering fats and oils. The company had said in 2016 it was considering “various options to find a new vocation” for the St. Hyacinthe site.
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Olymel, which has its head office in the same community, said in a release Thursday the decision follows a reorganizing of its workforce in the fresh pork sector “as well as a reduction in the volume of products requiring packaging.”
The company’s primary kill-and-cut facilities are now able to cover the packaging operations previously handled in part at the St. Hyacinthe plant, Olymel said, and products which until now have been stored there will be transferred to other internal or external distribution centres.
Citing “the scale of the investments required to maintain the melting operations for lard production,” Olymel has decided to stop that work and will instead sell and ship its raw materials for lard to a third-party company.
Employees still actively working at the plant have been notified and received 12 weeks’ notice of termination as per Quebec labour law, Olymel said.
All affected employees get the opportunity to be “voluntarily relocated” to one of four Olymel facilities — two of which, at St. Damase and St. Rosalie, are located in the same municipality and specialize in fresh poultry and further-processed poultry products, respectively.
The other two are the Unidindon turkey plant at St. Jean-Baptiste-de-Rouville and the company’s further-processing plant at St. Jean-sur-Richelieu. Employees who’d rather work at other Olymel facilities further afield in Quebec may also use the company’s relocation plan to do so, it said.
Olymel management said it will be “carefully weighing” available options for disposal of the St. Jacques Street plant itself, noting its buildings and land take up a “significant area in the heart of the municipality.”
Olymel CEO Yannick Gervais, in Thursday’s release, said the decision to close the plant “ties in with the restructuring of the fresh pork sector and stems from a months-long analysis that concluded today.”
The closure, he said, is meant to help ensure the company’s fresh pork sector “gets back on the road to profitability after two years of difficulties caused by the impacts of the COVID-19 pandemic, the labour shortage, market uncertainties and various other factors underlying the unfavourable economic situation.”
Olymel had already announced in July that it would cut back the packaging operations at the St. Jacques Street plant. Last month it served layoff notices for 57 people in its management ranks and said it would eliminate another 120 mainly administrative positions via attrition.
The Olymel arm of Sollio in fiscal 2021 booked a $60.2 million loss before patronage refunds and income taxes, down from earnings of $215.4 million in fiscal 2020. The drop into the red was “largely attributable” to its fresh pork operations in Quebec and Alberta, Sollio said in its annual report in February.
At that time, the company said factors dragging on the bottom line had included a loss of market access to China, a COVID-19-related shutdown at its Red Deer, Alta. hog plant, labour shortages, related outsourcing costs, a four-month strike at its Vallee-Jonction, Que. pork plant, higher hog supply costs and a stronger loonie making Canadian products less attractive internationally. — Glacier FarmMedia Network
