Burlington pork plant changes hands again

by BETTER FARMING STAFF

University of Guelph agriculture economist Ken McEwan calls Sofina Foods' acquisition of Fearmans Pork Inc an “excellent fit” for both the purchaser and for the oldest established pork processor in Canada.

 The purchase, announced Tuesday, for an undisclosed figure, “gives Sofina the assuredness of supply from a quality supplier and it provides Fearmans with a lot of long run security” because it means the plant can move away from the “very very competitive wholesale market into the branded product market,” McEwan says.

For producers, it’s good because there’s a potentially much stronger agri-food company to do business with, McEwan adds. Sofina has branded product and labels. It processes other meats and it has an international presence, including Japanese and U.S. connections and its operations are spread across Canada. The company’s Quality Meats brand - no connection to the Ontario pork processor of a similar name - “is a brand that’s quite recognizable here in Ontario for sausages, bacon, breakfast sausage, those sorts of products,” he says. “That kind of brand power is important.”

Mary Jane Quinn, a spokesperson for Ontario Pork, says the purchase is a positive for the industry. “They know the business,” she says of Sofina, noting that the company is Canadian-owned, well established in the protein category of food processing and possesses a good reputation.

Quinn says there will be no change for the producers who supply the plant and notes the company has already alerted them to the sale.

Sofina, based in Markham, self-describes as a private, family-owned company manufacturing primary and processed foods such as pork, beef, turkey and chicken products for retail and foodservice customers. Company brands include Lilydale, Fletcher’s Vienna, Cuddy and Quality Meats. The acquisition will bring the number of primary and further processing facilities it operates up to 13. Other plants are located in British Columbia, Alberta, Saskatchewan and Washington State.

“This acquisition provides Sofina with secure access to high quality raw materials that will allow us to grow our fresh meat markets and build and sustain our further processed protein business,” states Michael Latifi, Sofina’s chairman and CEO, in the release. A company spokesperson could not be reached for comment.

According to the news release, Fearmans, established in 1852, is Canada’s oldest pork processing facility and the largest in Ontario. Chilled pork, specialty and counter-ready, are among the products it supplies to other processors, retailers and food service providers.

Sun Capital, a private investment firm headquartered in Florida, acquired the Burlington plant from Maple Leaf Foods Inc. in November 2010 for $20 million.

McEwan says Sun Capital has a history of holding acquisitions for a few years and then selling to companies “where there might be a better fit or there might be synergies or efficiencies to be gained.” He cites the company’s recent sale of a tomato processing plant in Dresden as an example.

McEwan estimates the Burlington plant’s current slaughter volume is 32,000 to 35,000, roughly a third of the weekly volume of market hogs processed in the province, running a four-day shift. The plant has the capacity to process 42,000 to 45,000 hogs over five days, he says. McEwan says he did not notice any major capital improvements to the plant on a recent tour.

If Sofina decides to expand the plant’s slaughter volume, “they’re going to have to compete and find creative ways of getting those hogs,” he says, noting supply in the province is currently tight and a large proportion of market hogs are tied up in other business arrangements.
 
Sofina expects the sale to close shortly “after regulatory approvals are received, upon which Fearmans will become a wholly owned subsidiary of Sofina.” BF