Crop Management Network (CMN) said Friday the conditional deal it announced in March to buy Performance Ag Group won’t proceed.

CMN, a joint venture between an employee-owned network of retail outlets and La Coop federee’s Agrico Canada arm, operates sites at Edberg, Camrose, Daysland, Fort Saskatchewan, Holden, Vegreville and Stettler, plus a distribution and delivery firm, Sjogren Logistics.

Performance Ag, which itself took on a new ownership team in 2017, operates an outlet just south of Evansburg, about 45 km south of Mayerthorpe, and, since April last year, a second outlet east of Calmar, about 15 km west of Leduc.

“As both parties worked through the usual processes involved in transactions of this nature, it became apparent that the deal for CMN to acquire the assets of Performance Ag Group was not in the best interests of either company,” CMN said in a release Friday.

Expanding its retail network has been one of CMN’s stated goals since Agrico bought its 50 per cent stake in the operation in 2017. CMN said Friday it “will continue to look for growth opportunities in the future.” — Glacier FarmMedia Network

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The federal Competition Bureau said Tuesday it has an agreement in place for its approval of a deal which will see Cargill’s Ontario grain and ag retail outlets and its joint-venture stake in South West Ag Partners go to La Coop for an undisclosed sum.

For the deal, which was announced back in March, to clear, La Coop has agreed to sell Cargill’s retail operations at Alliston, Harrow, Tilbury and Waterford, Ont. to “a purchaser acceptable to the commissioner,” the bureau said.

From its review, the bureau said, it “concluded that within certain local areas of southwestern and central Ontario, the proposed transaction would likely substantially lessen competition in the retailing of crop inputs, and specifically fertilizers and crop protection products.”

Specifically, the bureau said Wednesday in a position statement, Quebec-based La Coop’s agribusiness division — set to rebrand next year under the name Sollio Agriculture — distributes crop inputs including fertilizer, seed and crop protection products through its Agronomy Co. of Canada to the Agromart ag retail chain, in which it owns a 50 per cent stake.

On top of Cargill’s 12 crop input retail locations in the province, the deal would also give La Coop a 50 per cent stake in the five crop input retail sites operated by South West Ag.

In the four areas in question, the bureau found “the parties’ combined market shares were high; the parties were close rivals (and) the proposed transaction would likely result in the closure of one or more of the parties’ sites, thereby eliminating choice from the marketplace.”

Furthermore, the bureau said, in those areas, it would be “unlikely” for other new players to set up shop “due to the high costs of entry relative to anticipated long-term profitability.”

Harrow and Tilbury are about 40 km south and 55 km east of Windsor, respectively, while Alliston is about 40 km southwest of Barrie and Waterford is about 25 km south of Brantford.

Unlike on the Prairies, the bureau said, crops in Ontario tend to be grown on a smaller scale and “the ability for growers to store large quantities of crop inputs on-farm is much more limited.

“This scarcity of on-farm storage creates a ‘just-in-time’ demand for crop inputs and crop input application services that limit the arena within which significant substitution occurs.”

Thus, the bureau found “the relevant geographic markets for crop inputs retailing in this matter tended to be narrower than those it has investigated on previous matters in Western Canada.”

As for the sale of Cargill’s Ontario grain handling assets, the bureau said it found “early in its investigation” that part of the deal is “unlikely to result in a substantial lessening of competition with respect to grain handling.”

La Coop, the bureau said, has “limited pre-existing grain handling infrastructure in Ontario” and there remains “effective remaining competition from well-established grain handling entities.”

In all, the assets going to La Coop will include Cargill’s wholly-owned grain handling sites at Melbourne, Princeton, Shetland, Staples and Talbotville and its wholly-owned input retail sites at Clinton, Courtland, Harriston, Melbourne, Mount Albert, Princeton, Shetland and Talbotville.

La Coop will also get Cargill’s interest in the South West Ag grain handling sites at Becher, Grande Pointe, Rutherford, Tupperville and Wallaceburg, plus a share in South West-owned Palmerston Grain and in “all grain satellite relationships.”

That stake also includes an interest in South West’s crop input retail businesses at Becher, Dover, Eberts, Ridgetown and Rutherford.

The deal with La Coop doesn’t include Cargill’s export terminal in Sarnia, its AgResource crop inputs wholesale business or any other Cargill businesses in Ontario or elsewhere in Canada.

Matthew Boswell, the Competition Bureau’s interim commissioner, said in its release Tuesday that its agreement with La Coop and Cargill “will help maintain competitive prices and product choices for farmers in Ontario.” –– Glacier FarmMedia Network

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The co-operative announced Monday it will pay an undisclosed sum for a 50 per cent stake in W-S Feed and Supply, based at Tavistock, Ont., about 30 km southwest of Kitchener.

The company operates a “multi-species” feed mill at Tavistock and a certified organic swine and poultry feed mill at Mount Forest, about 60 km northwest of Guelph.

The new partnership, La Coop said, “will continue to manufacture a wide variety of feeds for dairy, including organic, as well as beef, swine and poultry production.”

La Coop, which owns meat packer Olymel and is also “already well established” in the feed sector in Quebec and the Maritimes, closed a deal in April to buy the Canadian assets of Winnipeg feed processor Standard Nutrition Canada.

La Coop’s agreement in principle with W-S is still “subject to the fulfillment of certain conditions” before closing, to be completed “in the upcoming weeks,” the co-operative said.

The shift to joint ownership will be “seamless” for W-S customers, La Coop said, as the feed miller’s “key” management and sales teams will stay in their current positions.

The deal “represents a strategic new entry into Ontario’s agricultural market, but this time into the animal nutrition industry,” Ghislain Gervais, La Coop’s president, said in a release Monday.

Set up in 1965 at St. Jacobs, Ont. by Earl Wideman and Doug Spencer, W-S bought the feed miller then known as Mount Forest Elevators in 2001, and the Tavistock New Life Mill in 2008.

Sebastien Leveille, La Coop’s executive vice-president for agribusiness, said Monday the W-S business today offers the co-operative a line of “great quality products, strong presence in southern Ontario and steady growth in key livestock production markets.”

W-S president Paul Wideman said Monday the deal with La Coop “will bring new opportunities for our business and new expertise and value to the Ontario farmers that we serve.”

La Coop’s recent ventures into the Ontario ag market include a deal for Cargill’s crop input and grain assets in Ontario. That deal, announced in March, awaits federal Competition Bureau approval. — Glacier FarmMedia Network

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Olymel announced Thursday it will buy Burlington, Ont.-based Pinty’s, including its three southern Ontario chicken slaughter and processing operations at Port Colborne, Paris and Oakville, subject to approval from the federal Competition Bureau.

The deal’s financial specifics weren’t disclosed Thursday, but the bureau is generally required to get advance notice of any proposed deal when a target firm’s assets in Canada, or its revenues from sales in or from Canada from said assets, run over $92 million.

Olymel’s CEO, Rejean Nadeau, said Thursday the company “is confident that this transaction will benefit our development and growth.”

The combined processing capacity of Pinty’s three plants runs over 30 million kg per year, Olymel noted, adding the Ontario company booked a 2017 turnover of $235 million.

Pinty’s, Nadeau said, “has developed great expertise on the Canadian and American markets by offering innovative and exclusive products under brand names that have become extremely popular with many consumers and customers.”

Pinty’s products are sold across Canada and in the U.S. under the brands Pinty’s Food Service, Food City, Pinty’s Pub + Grill, Pinty’s Eat Well, Pinty’s Perfect Portions and Pinty’s Delicious Food.

Pinty’s products include cooked chicken wings, burgers, nuggets, strips, fillets, breasts, chunks and tenders. The company also markets its own lines of beef burgers, bottled sauces and kettle potato chips.

Pinty’s Poultry, founded in 1943 by Ed Pintwala, set up Pinty’s Delicious Foods in the 1990s as a joint venture with Port Colborne Poultry, founded by William and Petronella Vanderlaan.

Pinty’s today employs about 360 people, who “will continue to work within the company,” Olymel said, noting both companies “will continue their activities separately and independently” pending regulatory approval.

Jack Vanderlaan, Pinty’s executive chairman, said in the same release that the firm’s owners and management “are happy to have found a Canadian buyer.”

Vanderlaan said he believes Pinty’s staff “will benefit from the advantages of working for a large group like Olymel, a company that has a unique expertise in the processing and marketing of poultry products,” and that the deal “will also benefit our customers and consumers.”

St-Hyacinthe, Que.-based Olymel said the deal goes toward its aim to “consolidate its position in Canada as the leader of the pork and poultry slaughtering and processing sector.”

Olymel last year announced significant expansions and upgrades for several poultry and pork plants it owns in Ontario, Quebec and Alberta, plus a deal to buy the former European Quality Meats plant in Brampton, Ont. for poultry processing. — AGCanada.com Network

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Pork and poultry processor Olymel, owned mainly by Quebec agribusiness co-operative La Coop federee, announced Monday it will put up $2 million to convert a section of the Red Deer plant for sausage production.

The investment, Olymel said, is meant to equip the plant to supply fresh sausages for the western Canadian market, requiring “modernized” refrigeration facilities plus new equipment in a separate section of the plant.

The conversion work is expected to begin this month and to create 20 jobs on top of the plant’s current workforce of over 1,400, the company said.

“The new section for fresh sausage production at the Red Deer plant is an integral part of an investment plan directed at greater penetration in the western Canadian market, to meet growing demand for sausage products manufactured in Canada,” Olymel CEO Rejean Nadeau said in a release.

Sausage production at Red Deer is also expected to reduce the company’s product transit times into its markets in the West, Olymel said, so its customers “will therefore benefit from product with better shelf life.”

Olymel has operated at Red Deer since 2001, when it bought the hog slaughter and butchering plant from Premium Brands, then known as Fletcher’s Fine Foods.

The Red Deer plant “is diversifying its local activities and enabling it, among other things, to add value to some of its raw materials,” Nadeau said.

Making sausages at Red Deer will also “enable Olymel to expand its business base and serve the western Canadian market even better in product categories such as breakfast and fresh sausages, as well as bulk sausage meat,” the company said.

Olymel’s main sausage operations in Canada right now are centred around its Lafleur plant in the Quebec City area, at St-Henri-de-Levis.

That plant, which came to Olymel when it bought the Supraliment division of Groupe Brochu in 2005, has capacity to process over one million pounds of pork products per week, the company said on its website.

La Coop federee in late June announced it had picked up a $200 million investment from National Bank of Canada, the Fonds de solidarite FTQ, Fondaction CSN and Capital regional et cooperatif Desjardins (CRCD) to help finance “acquisition and capital investment projects,” in part to expand its agrifood activities across Canada.

La Coop also said last year it planned to offer a minority stake in Olymel for sale, to help fund expanded hog production and in turn boost the Red Deer plant’s output. — AGCanada.com Network

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The co-operative announced May 30 it plans to “gradually” close its Dispro farm equipment and parts distribution centre at Trois-Rivieres over a 12- to 15-month period from September this year through to next fall and lay off its 26 employees.

“The farm machinery market has, over the last few years, entered a period of pronounced decline that causes manufacturers and dealers to amalgamate,” Coop federee CEO Gaetan Desroches said in a release.

“In the light of this new state of affairs, La Coop federee’s role as a distributor is no longer relevant for our member co-operatives who now shoulder their responsibilities independently while selling farm equipment directly to Quebec producers.”

Coop federee’s Trois-Rivieres distribution site opened in 1977, handling farm machinery and parts as well as hardware.

Of the centre’s employees, Desroches said Friday, their “conduct over the last three years following the closing of the hardware distribution centre was of the highest standard” and the company and staff “will work together to minimize the impacts of this decision.”

Coop federee in fiscal 2015-16 booked a 23.6 per cent decline in farm machinery sales, reporting a “significant slowdown in the farm machinery market for most lines of equipment and the loss of distributor status for one of our suppliers.”

Co-op federee noted it won’t be renewing its lease on the building housing the distribution centre, once the operations wind down. The building’s sale was announced in January. –– AGCanada.com Network

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The co-operative at its annual meeting reported earnings, before patronage dividends and income taxes, of $275.44 million on $6.335 billion in revenues for fiscal 2016, up from $95.7 million on $5.992 billion in 2015.

The co-operative, “considering these excellent results,” declared patronage refunds of $55 million for the year, up from $35 million in 2015, not counting a $10.77 million dividend announced last month for members working with the co-op’s Olymel pork business.

With its financial results in mind, “we must continue playing our cards right while we continue to grow in the best interest of our members, the agricultural producers,” co-op president Ghislain Gervais said in a release Thursday.

The co-op noted it’s in the midst of an “ambitious” five-year plan for “development of their agricultural and agri-food activities across Canada with an increased level of integration in the agricultural supplies and meat processing sectors” while expanding its retail sales operations in Eastern Canada.

The co-operative also noted it has “international ambitions, an unavoidable path,” but its co-op structure, “with private and co-operative players, may it be in Canada or abroad, will remain at the heart of La Coop federee’s business model.”

CEO Gaetan Desroches described Coop federee as being “in an ideal position to engage into its next leg of growth despite the everyday challenges which are part of the commodity-related markets, including the impact of international trade agreements.”

The co-op model, he said, “remains a credible and relevant option. Accordingly, we must remain proactive and vigilant, as we are confronted to the reality of an agricultural world in the midst of major technological changes and where large-size business combinations are becoming widespread.”

The co-op’s meat packing division, Olymel, booked a “best ever” $3.16 billion in sales in 2016, up from $2.805 billion in 2015, mainly on expanded production through acquisitions, including deals for processors La Fernandiere and Atrahan Transformation.

On top of growth in sales of value-added products, the co-op noted a “major turnaround” in meat margins due to the re-opening of the Chinese export market to all of Olymel’s Quebec plants, plus a spike in margins in the U.S.

However, Olymel’s poultry, processed pork and bacon businesses’ numbers came in below 2015 levels, and its hog production businesses in both Eastern and Western Canada “recorded negative results.”

Coop federee’s agribusiness arm, which includes the Coop, Agromart, Agrico and Elite Grain businesses, booked $1.945 billion in sales for 2016, up from $1.764 billion in 2015, also mainly on acquisitions including Co-op Atlantic’s agricultural assets and Agrico’s new majority stake in Sharpe’s Soil Services, an eastern Saskatchewan ag retail business.

The co-operative’s hardware retail division, Groupe BMR, reported $873.6 million in sales for 2016, up from $808.6 million the previous year, mainly on a change in the reporting of sales.

BMR, the co-op said, is still pressured by a decrease in residential housing starts, which are a “traditionally strong market” for the division’s BMR and Unimat retailers. The farm machinery department also saw a 23.6 per cent decline in sales on a “significant slowdown” in the market for most equipment lines.

During fiscal 2015-16, the co-operative also amalgamated its Sonic energy business with a major Quebec distributor, Groupe Filgo, to create joint venture Songo Energies.

“This new entity will be in a more favourable position to face the major challenges the sector is confronting,” the co-op said Thursday. — AGCanada.com Network

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Olymel, the meat packing and processing arm of Quebec’s Coop Federee, announced Tuesday it has sealed a partnership deal with livestock producer and processor Groupe Robitaille.

That deal, first announced last November, gives Olymel a 50 per cent share in family-owned Robitaille’s hog slaughter, butchering and processing arm, Aliments Lucyporc.

The two companies in turn have pledged an $80 million investment in the Lucyporc plant’s hometown of Yamachiche, about 20 km west of Trois-Rivieres. That investment, however, will go mainly into expansion, reorganization and upgrades at Atrahan Transformation, another federally-inspected hog slaughter and pork boning and cutting plant at Yamachiche.

Olymel and Atrahan reached a separate partnership deal in February last year. Following the expansion and reorganization at the Atrahan plant, expected to be complete within three years, a second shift will be introduced, doubling the plant’s production volume, the companies said.

On top of the 360 Atrahan staff and 430 Lucyporc staff already working at Yamachiche, the expansion is expected to create another 350 jobs, the companies said. Both plants are also expected to keep operating over the 36-month expansion period.

The Atrahan operation is already Quebec’s fourth-biggest pork packing facility, processing almost one million hogs a year. Its expansion is to include “redevelopment” of its hog receiving area, expansion of its slaughter section, cold rooms and butchering room, storage areas, shipping and service areas, as well as water treatment facilities, followed by outfitting with “the latest equipment.”

The Atrahan expansion, Olymel said, “will create ideal conditions for sharing of expertise and maintenance and compliance with product specifications, thus enabling it to satisfy the customer requirements, especially in Japan.”

Lucyporc, which was set up at Yamachiche in 1998 and already specializes in products such as Nagano pork and the Mugifuji brand for the Japanese export market, “will play a vital role in meeting the standards in product specifications,” the companies said.

Once the expansion is ready, the day shift at the Atrahan plant on des Acadiens Road in Yamachiche “will be mainly devoted to producing value-added products under the Mugifuji and Nagano brands in full compliance with Lucyporc specifications for these products.”

Olymel CEO Rejean Nadeau, in Tuesday’s release, said the company’s “analysis of market developments and partnerships concluded in recent years… has led us to develop a new business model designed to adapt to the challenges of today’s markets.”

The new manufacturing model, he said, is meant “to put our fresh pork sector in Eastern Canada back on track to long-term profitability, on the one hand, and on the other, to increase its efficiency, while acquiring the means to further improve the quality of our production and ensure the success of value-added products.”

The partnership and expansion will also allow the partners to “take advantage of the synergies generated by pooling our expertise and strengths so as position ourselves for the long term and be increasingly responsive to our customers,” Groupe Robitaille president Claude Robitaille said in the same release.

The companies said their reorganization plan is also “under discussion” with workers at both Yamachiche plants, both represented by TUAC (UFCW) Local 1991-P. The Atrahan plant’s workers ratified a three-year deal earlier this year, running to early November 2018. — AGCanada.com Network

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Olymel said Friday it will halt ham deboning at its St-Hyacinthe plant in September 2017, eliminating 340 positions.

Ham deboning work, until now the St-Hyacinthe plant’s designated specialty, will instead be done at plants with both slaughtering and butchering operations, Olymel said.

That move, the company said, will “improv(e) operational efficiency and reducing costs considerably, in terms of both fixed costs and shipping.”

Olymel’s hog slaughter and butchering plants — at St-Esprit, Yamachiche and Vallee-Jonction — are “now geographically closer to the further-processing plants they supply with raw materials,” the company said.

The St-Hyacinthe plant will remain open, but with about 70 staff handling frozen product storage operations and a rendering line for lard production.

Olymel said Friday it’s also “studying various options to find a new vocation for the plant, which would enable it to fulfill other needs for the company.”

Olymel in June announced expansion work at its St-Esprit hog plant, which it said at the time would begin to handle greater output of “value-added” products and chilled pork.

The company in June also announced a Quebec City-area sausage plant at St-Henri-de-Levis would be repurposed for ham processing, after Olymel bought Trois-Rivieres sausage maker La Fernandiere and said it would move its sausage lines to that company’s plant.

The cut at St-Hyacinthe was “a difficult decision, but a necessary one if we are to achieve the conditions of efficiency and profitability that will enable us to maintain the bulk of other jobs across all our operations, and even create new ones,” Olymel CEO Rejean Nadeau said Friday in a release.

The job cuts, he said, were “deemed necessary after a thorough analysis of processing costs with a view to making all our operations more efficient.”

Olymel’s St-Hyacinthe plant saw a work stoppage in 2009, with unionized workers reportedly protesting a proposed wage freeze following a major pay cut in 2005, when the plant was said to be under threat of closure.

“I have requested that everything be done to facilitate the transition for employees assigned to another position, or their relocation to another Olymel facility,” Nadeau said Friday.

A plan has been set up and a relocation committee formed to move affected employees to other Olymel plants within a 70-km radius of St-Hyacinthe, the company said.

Apart from its pork slaughter and butchering plants, Olymel noted it operates other Quebec food processing plants at Drummondville, Ste-Rosalie, St-Damase and St-Jean-Baptiste, and “other types” of operations at St-Bruno, Boucherville and St-Valerien.

La Coop federee said earlier this year it plans to sell an ownership stake of up to 49 per cent in Olymel, to fund the co-operative’s plans for further expansions in pork processing and ag retail in Western Canada. — AGCanada.com Network

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La Co-op would retain control of Olymel, which along with Maple Leaf Foods is one of Canada’s two big pork processors.

The co-operative, which had $6 billion in revenue for the year ending Oct. 31, 2015, plans to expand hog production in Western Canada to increase processing at its Olymel slaughter plant at Red Deer, Alta., and is also hunting for partners in farm supply stores, he said.

The CEO said La Coop plans to spend $300 million over five years on expanding hog production and investing in stores.

Selling a large stake in Olymel would help fund the expansion, which is aimed at competing with U.S. packers such as Tyson Foods and Hormel Foods, Desroches said.

“The goal we have is to increase the chain’s value,” he said. “It’s a coordination of every step in production to the customer.”

Olymel had revenues of $2.8 billion last year.

Desroches said La Coop wants a strategic partner, another company already in the hog business, in Olymel.

He declined to say how much interest he has received.

La Co-op has no plans to change its structure, including any initial public offering, Desroches said.

–– Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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