Fire at the Olymel bacon processing plant in Princeville: The facility will not be rebuilt

ALL EMPLOYEES WILL BE OFFERED AN OPPORTUNITY TO WORK IN ANOTHER FACILITY

ST-HYACINTHE, QC, Sept. 18, 2012 /CNW Telbec/ - After an in-depth analysis that required several months of evaluation, the Olymel executive today announced its decision not to rebuild the Princeville bacon production plant that was destroyed by a major fire on May 6. Olymel management is aware that this decision will be a disappointment, especially for the employees affected by it. However, after considering several options, such as converting the old facility to other types of operation, and after evaluating market conditions, Olymel believes it currently has a sufficient number of bacon processing facilities to meet demand from its customers in Canada and abroad. The difficult situation in the bacon market, together with the consequences of the fire, have forced Olymel to review the distribution of its operations in the pork processing sector in the coming months in order to ensure the efficiency and the profitability of its operations. This morning, it is with deep regret that the Olymel executive notified the affected Princeville employees, their union representatives, and municipal and regional authorities of this decision, which is final.

"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. 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 U.S. 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. The situation in the bacon sector has been under close watch for several years, and various remedial measures have been implemented in order to improve results. Olymel is already operating two bacon production plants, one in Drummondville, Quebec and the other in Cornwall, Ontario. It has invested heavily in modernizing procedures at these facilities by installing cutting edge equipment. Given the weak bacon market, Olymel believes that its existing facilities have sufficient capacity to serve the markets. We have decided to focus our efforts on returning to profitability in this sector by rationalizing our activities and consolidating from existing plants," noted Olymel CEO Réjean Nadeau.

CREATION OF A CENTRALIZED JOB DATABASE FOR EACH PRINCEVILLE EMPLOYEE

In the month of May, and pending a decision concerning the future, Olymel had established a voluntary temporary relocation program for the 180 employees who worked in the Princeville bacon processing plant and were left jobless after the fire. This program enabled employees who wished to do so to be relocated to several other Olymel facilities located within 100 kilometres of Princeville until September. By May 29, 91 employees had signed up for the program, which allowed them to maintain employment income and enjoy the conditions in effect in participating plants. This temporary, voluntary program is now coming to an end, and a number of participating employees have been offered permanent positions in some facilities when the positions became available. This is particularly the case in the bacon processing plant in Drummondville.

Even though this temporary relocation program is coming to an end, Olymel has decided to establish a centralized job database from which it will be able to offer permanent employment to each Princeville employee requesting it. Employees laid off as a result of the fire at the Princeville bacon processing plant will have hiring priority. This job database already comprises 162 available positions to meet current manpower needs at nine other Olymel facilities in Quebec. Olymel will extend its plan to cover the costs of transportation from Princeville to other plants until December 31, a measure that had been offered from May to September in conjunction with the Temporary Relocation Program.

In addition, in the coming days, in accordance with the provisions of the law, Olymel will work closely with union representatives and regional placement services such as Emploi Québec to set up a Reclassification Committee in order to help workers from the Princeville bacon processing plant in their transition to new jobs.

Olymel wishes to thank the production employees, managers, customers and suppliers who have all been valuable partners over the many years the Princeville bacon processing plant was in operation. Olymel also acknowledges the active cooperation received over the years from Princeville area municipal authorities and regional and economic development organizations. The company remains very present and will continue to contribute to the economic development of the region through the activities of its hog slaughtering and cutting plant in downtown Princeville.

On May 6 a fire destroyed most of the facilities at the Princeville bacon processing plant, which housed two divisions. The Vermont Division, whose operations included primarily injecting, smoking and precooked bacon, was destroyed completely, and this part of the facility has now disappeared. The Prince Division of the plant, whose operations included pressing, bulk slicing and packaging, was heavily damaged by smoke and water and will soon be demolished.

About Olymel l.p.

Olymel l.p. is a leader in the slaughtering, processing and distribution of pork and poultry meat products in Canada, with facilities in Québec, Ontario, and Alberta. The company employs more than 10,000 persons and exports nearly half its production, mainly to the United States, Japan and Australia, as well as some sixty other countries. Its sales stood at $2 billion this year, with a slaughtering and processing capacity of 160,000 hogs and 1.7 million birds a week. The company markets its products mainly under the Olymel, Lafleur and Flamingo brands.

SOURCE: OLYMEL L.P.

For further information:

Olymel l.p.:  

Richard Vigneault
Communications     
Tel.: (450) 771-0400 
Cell.: (514) 497-1385