ST. HYACINTH, Quebec – Weak demand and other financial considerations led to Olymel LP’s decision to not rebuild a bacon-processing plant destroyed by fire in May, a company executive announced Sept. 19.
Company management considered alternative uses for the plant. But after evaluating market conditions, company leadership concluded that Olymel has a sufficient number of bacon-processing plants to meet customer demand.
"After reviewing all of its processing operations in the bacon production sector, Olymel has come to the conclusion that rebuilding the Princeville bacon-processing plant is not justified given the current market conditions and demand for this base product," said Réjean Nadeau, Olymel CEO. "Results for this sector have been in decline for several years. Lower volumes – less than 4.7 million kilograms in 2011 – declining hog production and the resulting reduced availability of bellies, fierce competition in both the fresh and precooked sectors from US manufacturers that enjoy much lower production costs, and finally the strength of the Canadian dollar are among the factors that have lead us to make the difficult decision not to rebuild the destroyed factory in Princeville."
Nadeau said Olymel is already operating two bacon production facilities — one in Drummondville, Quebec, and the other in Cornwall, Ontario. He added that Olymel had invested heavily in modernizing operations at those facilities by installing advanced equipment.
"Given the weak bacon market, Olymel believes its existing facilities have sufficient capacity to serve the markets," Nadeau concluded. "We have decided to focus our efforts on returning to profitability in this sector by rationalizing our activities and consolidating from existing plants."
Olymel said it would establish a centralized job database to help employees find permanent employment. Employees laid off because of the fire will have hiring priority. Olymel said the database already has 162 available positions to meet current labor needs at nine other Olymel facilities in Quebec.
Olymel said the company would work closely with union representatives and regional placement services to help affected workers transition to new jobs.
Fire destroyed most Princeville facility which housed two divisions: The Vermont Division, which included primarily injecting, smoking and precooked bacon, was destroyed, according to the company. The Prince Division of the plant included pressing, bulk slicing and packaging. It sustained heavy smoke and water damage and will soon be demolished, the company stated.
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