Investing $150M in Olymel was 'the right thing,' Quebec economy minister says

Quebec has no plans to invest more in Olymel. Despite the pork industry's struggles, Economy Minister Pierre Fitzgibbon said the $150 million in government aid granted in 2021 was the right thing to do.

"Olymel, as an investment by the government, we are very confident that we have done the right thing," the minister said at a public appearance in Mirabel Monday.

The closure of the Valle-Jonction pork slaughterhouse, the fifth closure of an Olymel facility in a few months, is "distressing" for the 994 workers affected, the minister added.

Calling the company a "Quebec flagship,"Fitzgibbon reiterated his confidence in current management.

"Of course, it has to stay alive. I think it's a well-run business," he said.

"I think that after the closure, [Olymel] will be solid financially. We just have to work now with the employees and [ask] what are we doing with the site."

At a news conference on Tuesday about a new pork pricing agreement which is set to be unveiled at noon, Agriculture Minister Andr Lamontagnesaid Olymel is "by far our biggest player in the pork industry."

"When they came to our government a few years ago to request that investment, their plan was for improving their capacities in various plants, they had all kinds of issues as far as computers, so all those investments have been done," said Lamontagne, responding to a question about the closure of one of the plants just two years after the investment.

"What I could say is that, hadthose investments [not]been done, what would be the situation today? It's hard to answer."

Less pork consumption abroad

Fitzgibbon pointed out that the $150 million in support from the Quebec Business Growth Fund and Investissement Qubec granted in 2021 was linked not to the activities of Valle-Jonction but to measures intended to increase the productivity of the company.

"There's a lot less [pork] consumption internationally, I think it's kind of unavoidable," Fitzgibbon said. "Did we know two years ago that they were in favour of closing Valle-Jonction? The answer is no, but there were people who thought there was a consolidation that would happen depending on pork exports."

Asked about the relevance of new financial support from the government, the minister said that no request has been made so far.

Last week,Yanick Gervais, president and CEO of Olymel, said that he had made good use of government aid.

"We used those amounts to make investments in other sites. We didn't use it to pay for groceries," he said.

Reducing slaughter capacity

The pork industry must deal with an unprecedented crisis in Quebec, after suffering $390 million in losses over the past two years.

It must also cope with the closure of the Chinese market, disruption of the supply chain and labour scarcity.

Olymelintends to reduce its slaughter capacityby one million hogs (20 per cent), starting in June.

The leveurs de porcs du Qubec, an organization that advocates for Quebec pig breeders, hasadopted a voluntary buy-back program for producers who withdraw from production for at least five years, with the objective of reducing the number of pigs raised in Quebec by one million.