Canada - Olymel hires Bouchard to restructure the pork sector

Meat processor Olymel LP has hired former Quebec premier Lucien Bouchard to help the company restructure the pork sector in the province, where Olymel warns that mounting losses threaten 4,000 of its jobs. The pork producer announced Wednesday it has hired Bouchard, now a partner in Davies Ward Phillips & Vineberg law firm, to carry out negotiations with the company, its unions, other producers and stakeholders in the industry "with an objective of finding lasting solutions to the grave problems facing the company." Olymel accounts for 60 per cent of Quebec pork production and employs 11,000 people at plants in Quebec, Ontario and Alberta. The company ships about half its production to the United States, Japan and Australia. The company has been hit hard by the rising Canadian dollar, which has squeezed its exports to the key American market and produced major losses in the last few years. Olymel warned that almost 4,000 of its jobs are at risk in the fresh-pork sector if nothing is done to improve production, marketing, slaughtering and processing conditions. Between 2003 and 2005, the company had losses of more than $100 million, and Olymel foresees an additional loss of about $55 million in fiscal 2006 alone. "Bringing together the various players in the pork sector in order to find and put forward solutions and to make a communal effort to consolidate the industry represents the challenge for Lucien Bouchard and a vital necessity for Olymel and for the whole of the sector," Rejean Nadeau, CEO of Olymel, said in a statement. "We are confident that Mr. Bouchard will succeed in mobilizing the whole industry to find long-term solutions. A solution to the problems of the company's fresh-pork sector will enable Olymel to focus its energies on development and customer service." Besides the currency impacts on the company, Olymel has been hurt by volatile hog deliveries and payroll costs that are significantly higher than those of its competitors. Moreover, the company has smaller plants and lighter hog weights, has been affected by a ban on new pork production imposed in 2002 and is struggling with the effects of swine disease known as post-weaning wasting syndrome, which has decimated part of Quebec's hog population. "My task is to bring about, as soon as possible, the conditions that will not only enable Olymel to continue its activities in the Quebec fresh-pork sector but will also help to improve the position of the province's whole pork industry in relation to what is happening elsewhere in North America," Bouchard, a former labour lawyer, said in a release. "Success in this endeavour is in everyone's interests - the producers, the workers in the industry and the public authorities." In a separate matter, Olymel announced it plans to file a claim with the Quebec High Court for a judicial review of the adjudication handed down last August which prevented the planned closure of the company's plant at Saint-Simon, Que. Olymel slaughters, processes and sells pork and poultry products and is expected to generate almost $2.5 billion in sales this year. The company sells its products mainly under the Olymel, Lafleur and Flamingo brands.