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Earth turning for contentious N.B. chicken plant

New Brunswick poultry producer Groupe Westco and Quebec poultry and pork packer Olymel expect to have a site prepared by the end of October for the much-disputed chicken slaughter plant they aim to have up in about a year.

The two companies, which in 2008 formed a joint venture dubbed “Sunnymel” for this project, began moving ahead again earlier this summer after claiming a knockout win at the Federal Court of Appeal in a dispute over whether Westco is obliged to supply poultry packers within New Brunswick.

The Sunnymel partners on Monday laid out the timeline to build their $40 million plant, to be built at Clair, a village in New Brunswick’s Madawaska region about 30 km west of Edmundston.

The site development phase, ending Nov. 1, is to include building of access roads, fencing, site drainage and levelling at a cost of about $2.2 million, with foundation, water conduit and building construction to follow starting this fall.

Invitations to tender for the slaughter, cutting and deboning plant’s construction have already been sent out, the companies said Monday.

The partners said they expect Sunnymel to be equipped “with the most advanced, efficient equipment in the poultry processing industry, in the areas of production and bio-safety as well as environmental protection.”

“By pooling our expertise and know-how we will reap the benefits of farm-to-plate integration, a business model that is better able to meet the needs of the entire poultry chain, from producers to distributors and consumers,” Olymel and Westco CEOs Rejean Nadeau and Thomas Soucy said in a joint statement.

“Entire market”

Sunnymel, when open, is expected to serve the “entire Maritimes market from New Brunswick” with slaughter space to handle up to 450,000 birds per week.

After signing the joint venture agreement with Olymel in 2008, Westco in 2009 began shipping its chickens to Olymel processing plants in Quebec, pending Sunnymel’s construction.

Objecting to the two companies’ plans was Ontario-based poultry processor Maple Lodge Farms, which currently runs New Brunswick’s only federally-inspected poultry packing plant, Nadeau Poultry at St-Francois-de-Madawaska, just west of Clair.

The previous Liberal government in New Brunswick responded to the layoffs in January 2010 with a ministerial order designating Nadeau as the only federally-inspected plant for processing of chickens raised within the province. That order was later invalidated in court and the Liberals were voted out in September.

Nadeau in February also proposed a New Brunswick Chicken Marketing Agency that would deal “solely” with the marketing of broiler chickens past the farm gate and would allocate live chicken supply to processors both within and outside New Brunswick, but the province has rejected that idea.

The Ontario firm in February contended that the dispute wasn’t just a commercial conflict but a “supply management failure,” in which Westco was allowed to form a “production cartel” now controlling almost four-fifths of New Brunswick’s chicken supply and “attempting to starve Nadeau of chickens.”

Maple Lodge’s Nadeau arm had invested millions in a new plant in 2002 when its original plant burned down, rebuilding “based on the expectation of a stable supply of product as guaranteed in supply management,” CEO Michael Burrows said at the time.

Maple Lodge had also sought a ruling on the Sunnymel plan from the federal Competition Tribunal, which in June 2009 cleared the Olymel/Westco venture. The tribunal ruling was upheld June 2 at the Federal Court of Appeal.

The tribunal had found Westco’s decision to stop supplying Nadeau does not constitute a “refusal to deal” in competition law and was “in no way illegal,” Westco said at the time.

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