Sunnymel offers to lease Nadeau’s N.B. poultry plant

A joint chicken processing venture between Quebec meat packer Olymel and New Brunswick poultry producer Groupe Westco is offering to lease a rival plant until its own new facility is up and running.

The “Sunnymel” partners on Thursday went public with an offer to lease the Nadeau Poultry plant at St. Francois-de-Madawaska, N.B., from June 2012 through to November when the Sunnymel plant at nearby Clair opens, “so as to preserve as many jobs as possible” in the area’s poultry processing sector.

In a release Thursday, Westco and Olymel said their offer was in response to an announcement from Nadeau and its Ontario-based parent firm, Maple Lodge Farms, that it would “cease operations” at St. Francois by June 2012 and concentrate its operations at a new Maple Lodge plant expected to be built by then at Kentville, N.S.

Although Maple Lodge in July 2010 announced a partnership with a group of chicken and turkey producers for the Kentville plant — and Nadeau recently said it “could close” the St. Francois plant if it can’t get a stable supply of chickens — Nadeau has not made any formal announcement that it would close its New Brunswick plant.

The Sunnymel partners, who now describe their plans for Clair as an investment of over $40 million that will create over 250 jobs, said leasing the Nadeau site “will allow our industry to continue operating and preserve jobs.”

“Despite Nadeau’s repeated refusals to come to an agreement with us, we are taking one more step today to protect the workers,” Westco CEO Thomas Soucy said in Thursday’s release.

The Sunnymel partners, who began site prep work at Clair last month, announced their joint venture in 2008, after which Westco began shipping its Sunnymel birds across the provincial border to Olymel’s plants in Quebec for processing.

Nadeau then laid off about half its workers at St. Francois, in response to which the previous Liberal provincial government issued a ministerial order in early 2010 designating Nadeau as the only federally-inspected plant for processing of chickens raised within New Brunswick.

That order was later invalidated in court and the Liberals were voted out in September last year.

“Never, ever”

Nadeau contends Westco and its associates were allowed to gain control of almost 80 per cent of chickens produced in New Brunswick, contravening the principles of Canada’s supply management system for poultry and defying regulations that had previously limited control of the provincial chicken supply by any one group to 10 per cent.

Now, “without a predictable supply of chicken, Nadeau Poultry could close,” the company said late last month.

Furthermore, Nadeau general manager Yves Landry said at the time, “building a second plant by trying to close another business is not economic development, it’s job transfer at best and creates downstream chaos in the industry.”

Sunnymel on Thursday also alleged Nadeau and Maple Lodge have “refused all proposals that would have enabled (Nadeau) to continue to process Westco chickens.”

The Sunnymel partners said their proposals since 2008 have included an offer to buy the St. Francois plant outright, a “possible partnership agreement for joint operation,” a “draft agreement for slaughtering at fair market value” while the Clair plant is built, or “payment of a premium similar to what Nadeau offers elsewhere.”

Nadeau hadn’t yet issued a formal response to Sunnymel’s latest lease offer as of Sunday night.

However, the St. John, N.B. Telegraph-Journal newspaper on Thursday quoted a Maple Lodge official as saying it has “never, ever been announced that we’re closing. The (Nadeau) plant is not for sale.”

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