CANADIAN pork processor Olymel LP is preparing to buy Big Sky Farms, Canada's second-largest pork producer, out of receivership as no superior offers were made by the deadline last week.
Big Sky, located near Humboldt, Sask., filed for bankruptcy liquidation last year after collapsing under the weight of persistent record-high feed costs (Feedstuffs, Sept. 17, 2012). The company produces about 1 million hogs per year.
Olymel, based in Montreal, Que., bid $65.25 million (Canadian/$66.58 million, U.S.) for the company (Feedstuffs, Oct. 22, 2012) but had to wait through an auction process to effect its acquisition.
Olymel does not currently grow hogs, and Big Sky has been a major supplier to the packer.
Meanwhile, Maple Leaf Foods Inc., another important Canadian pork processor, has offered $42 million (Canadian/$42.1 million, U.S.) for Puratone Corp., Canada's third-largest pork producer, which also filed for bankruptcy protection at the same time Big Sky did and for the same reasons (Feedstuffs, Nov. 5, 2012).
Maple Leaf, headquartered in Toronto, Ont., is also a major poultry processor and bread maker.
Puratone, located near Niverville, Man., grows 500,000 hogs per year and has been a major supplier to Maple Leaf.
The Maple Leaf and Olymel acquisitions cleared the Canadian Competition Bureau last year (Feedstuffs, Dec. 24, 2012).
Also last week, HyLife Group, Canada's largest pork producer, and Itochu Corp., a Japanese trading firm, announced that Itochu has acquired a 33.4% interest in HyLife for 5 billion yen ($56.7 million).
Itochu said the deal fits with its strategy to sell Canadian pork into the Asian markets, with a focus on China and Japan, where pork consumption continues to grow.
HyLife, located near La Broquerie, Man., has escaped the cost consequences that challenged Big Sky and Puratone due largely to the company's integrated structure in which it operates a processing plant, feed mills and trucking fleets. HyLife grows 1.4 million hogs per year.