Olymel shuts down another plant; over 900 employees laid off

Olymel closes hog slaughtering, cutting and deboning plant in Vallée-Jonction in the Beauce region of Quebec.

The decision was necessary to stop losses in the fresh pork sector, which have amounted to more than $400 million over the past two years and are jeopardizing the entire company’s profitability.

“After carefully examining the difficult situation in the fresh pork sector and searching for the best way out of this crisis, it has become clear that closing one of Olymel’s four slaughtering, cutting and deboning plants in Quebec was inevitable. However, no executive ever takes such a decision lightly. The first thing that comes to mind is the impact on employees and their families, on suppliers, including Beauce pork producers, and on the entire community in which the plant has operated for many years. Olymel management’s decision to close the Vallée- Jonction plant was not region-based. It was the result of a careful analysis that focused first and foremost on the operational capabilities of each of the four slaughtering, cutting and deboning plants owned by Olymel in Quebec. Closing a plant was necessary to reduce our slaughter capacity and review our business model in order to optimize it, and our analysis ultimately revealed the limitations of the Vallée-Jonction plant, given the steady decline in the available workforce and the condition of the facilities, which would require investing tens of millions of dollars in renovations,” said Yanick Gervais, president and CEO of Olymel.

This decision meant the layoff of 994 employees, including 911 union members (CSN) and 83 managers.

Given the nature of the Vallée-Jonction plant’s activities, and in order to facilitate the processing of the remaining hogs and thus meet producer demand in Beauce and other regions, the facility’s closure would take place over a period of more than eight months. As a first step, the evening shift involving 443 production employees will be abolished in mid-September. The day shift, which consists of 468 other production employees, should continue depending on supply and labour availability until the plant ceases operations completely on December 22, 2023.

For over two years, the pandemic, the labour shortage, the instability of export markets and the increase in raw material costs, among other factors, have created unprecedented negative conditions that have hit the pork industry hard and resulted in losses, which still have a major impact on Olymel. As a result, the company’s management has taken numerous steps to optimize its operations.

Over the past two years, the company has announced the reorganization of its operations, the reassignment of its workforce to value-added activities, task efficiency improvement efforts, the closure of certain sites, the sale of assets and a reduction in hog purchases of more than 2 million in Quebec and Ontario, all in the hopes of reducing its exposure to the risks in this sector and putting an end to mounting losses.

Olymel’s management is confident that through its repositioning in the fresh pork sector, which includes three modern hog slaughtering, cutting and deboning plants in Saint-Esprit (Lanaudière), Yamachiche (Mauricie) and Ange-Gardien (Montérégie-West), the company will be in a better position to reach the slaughter capacity that has been already adjusted from 140,000 to 81,000 hogs per week.

Olymel will soon be offering employees the option to sign up for a voluntary relocation program for staff that want to continue working for the company at another location.