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Manitoba Company Following EU Trend

Changes moving rapidly across the European pork industry may be a hint of what’s to come in other parts of the world.

There has been significant consolidation and major cross-border acquisitions. Value chains are moving internationally and the market is being driven by innovation and new business models, Karen Hamann of the private research company Danish Institute for Food Studies and Agroindustrial Development told the recent Banff Pork Seminar.

The meat industry is an economic driver in Europe, says Hamann. It is the largest subsector in the European food industry and the pork industry is by far the most important part of it. During the past five years consolidation among pork companies in Europe has been very intense and because the financial position of these largest companies has improved, industry analysts expect that trend to continue.

Europe’s consumer market is driven by large retail chains. In Germany, for example, discount chains control 25 per cent of food sales. Retailers’ private labels are still increasing. Buying power of retailers is growing and the assortment of pork is shifting from pieces and cuts to case-ready meat.

EU innovation projects are proving to be major drivers of change, built on co-operation and information sharing among stakeholders. For example, an EU research project called Q-pork chains, has a goal of developing high quality pork products in sustainable systems. It involves researchers, organizations, farmers and pork companies. The 62 organizations in 19 countries including U.S., Brazil, South Africa and China have assigned a budget $26 million CAD, from 2007-11.

One of Canada’s pork success stories, Hytek Ltd., is making some similar moves to what has been happening in Europe. Founded in 1994 as a joint venture between two farms in Southeastern Manitoba, it has quickly grown to become Canada’s largest pork producer. Today it is a fully integrated production system from genetics to meat products for the domestic and international marketplace.

Company CEO Grant Lazaruk, told the Banff Pork Seminar that the company has made several moves to strengthen their position in Canada and internationally. HyTek has begun an extensive rebranding program under the HyLife brand. “We wanted an umbrella brand that covered all of our divisions.”

The processing facility, rebranded HyLife Foods, has been expanded. Several specialized products have been developed including a high value Japan Chilled Pork Program and a line of Omega 3 pork in partnership with another group. Another product “Raised without antibiotics” or RWA program “has significant growth opportunity,” says Lazaruk.

In genetics, the company supplies its “Fast” genetics brand in North America and is expanding internationally. It has invested significantly in China in the past year.

“To be successful, our pork production systems must be competitive with other North American systems, control inputs and production processes, and understand the financial impact of all production inputs,” says Lazaruk.

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