Olymel and Westco Join Forces

CANADA - Major Canadian pig meat and poultry company, Olymel, is to join forces with Groupe Westco - a major poultry production group in New Brunswick.
calendar icon 20 March 2008
clock icon 4 minute read

The two companies will develop and consolidate their poultry production, slaughtering, cutting and deboning activities for the entire Maritimes from New Brunswick.

This new partnership is the result of a business relationship between Westco and Olymel l.p. formed almost a year ago.

"In an open market and a very competitive environment, the poultry industry should gain strength from this partnership, which brings together producers and operators with complementary expertise that will make the poultry supply chain for New Brunswick and the entire Maritimes more efficient. Producers, poultry industry workers, and consumers in New Brunswick and the entire Maritimes stand to benefit from the synergy created by the partnership between Westco and Olymel l.p.," Réjean Nadeau, President and CEO of Olymel l.p. and Thomas Soucy, President and CEO of Groupe Westco Inc. said in a joint statement.

"In an open market and a very competitive environment, the poultry industry should gain strength from this partnership"
jean Nadeau, President and CEO of Olymel l.p. and Thomas Soucy, President and CEO of Groupe Westco Inc., in a joint statement.

The two CEOs also confirmed that talks toward the acquisition of the Nadeau Poultry slaughterhouse in St-François-de-Madawaska, initiated in August 2007, had reached an impasse after its owner, Maple Lodge Farms, unilaterally decided to break off discussions in January.

Mr Nadeau and Mr Soucy said they had entered into negotiations with Maple Lodge Farms in good faith.

"We are producers in the region, and our number one concern remains preserving our activities in the long term. But we believe that to do this, we have to work with partners who truly want to consolidate, and whose experience and strength are beyond doubt," Thomas Soucy said.

The Olymel l.p. and Westco CEOs also indicated that they were prepared to go ahead with talks with Maple Lodge Farms executives, or even to intensify discussions with a view to a business agreement, if the latter showed a willingness to do so.

They added that the plan to acquire the Nadeau Poultry slaughterhouse would not result in any plant closings, and that in the event Maple Lodge Farms did not change its position, Olymel l.p. and Westco planned to build a new slaughterhouse in the region.

Mr Soucy and Mr Nadeau confirmed that, in the meantime, Westco's slaughtering volume would temporarily be transferred to an Olymel l.p. slaughterhouse in Quebec starting on 20 July.

"The partnership between Olymel l.p. and Westco is based on a thorough analysis of the market outlook in the context of the challenges raised by globalization. The creation of a completely integrated poultry business, from production to transformation, will provide us with a critical mass to make headway both in New Brunswick and the entire Maritimes region. Our partnership with a player like Olymel l.p., which has a strong nationwide presence and operates on international markets, and is known for its extensive experience in the slaughtering, processing, further processing and distribution of poultry products, is a guarantee of success. It is the best way to improve our productivity and the quality of our products, as well as build a profitable operation that can sustain jobs in the poultry industry," Mr Sourcy said.

Olymel l.p., meanwhile, said it is fully prepared and enthusiastic about working toward developing and strengthening the poultry industry in the Maritimes, and added that it is pleased to be able to link up with a partner like Westco, which has such deep roots in the region.

"The industry's future depends on the creation of a new business model based on partnership agreements between producers and processors, and integrates the production chain from breeder to consumer. A partnership like the one between Westco and Olymel l.p. delivers better risk sharing and opens up great potential to better serve the markets," Mr Nadeau said.

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