HyLife sells minority stake in company
- Details
- Published on Tuesday, January 8, 2013
By: Kate Jackman-Atkinson
myWestman.ca
On Jan. 7, La Broquerie-based HyLife announced the sale of one third of the company to Itochu Corporation, a Japanese-based company. For the last two years, Itochu, which owns food companies, has been one of HyLife’s Japanese customers.
Current HyLife shareholders and management will retain a majority interest in the company and the sale has been valued at around 5 billion Japanese Yen, about $56 million Canadian.
Itoshu was founded in 1858 and owns companies in six key areas: textiles, machinery, metals and minerals, energy and chemicals, food and general products and realty. They have investments in over 400 companies around the world and operate in 67 countries.
HyLife was founded in 1994 when two family farms joined to create an integrated farm to fork pork business. They had initially planed to build OlyWest, a slaughter plant in Winnipeg with two other partners.
However, controversy and opposition to the plant and its location resulted in the other two partners, Olymel LP and Big Sky Farms Inc., pulling out. In 2008, HyLife purchased Springhill Farms, an already operating federally inspected pork slaughter plant the Neepawa. Since purchasing the plant, now named HyLife Foods, they have invested heavily in upgrades and in June, they added a second shift, which increased production from 21,000 pigs per week to their target of 28,500 pigs per week.
Claude Vielfaure, HyLife’s executive vice president and chief operating officer, explains that Itochu’s investment in the company will “position us to continue the growth of [HyLife]”. He adds that following the breakup of the OlyWest group, HyLife pursued obtaining a slaughter plant on their own but said, “We were always interested in getting a strategic partner to help with marketing and growing the company.”
HyLife already exports pork products to Japan and it’s the destination for some of their most high value products. The investment in HyLife also complements some of Itochu’s other investments and Vielfaure said, “It’s very strategic on both sides.” With Itoshu’s existing distribution and marketing network in Asia, specifically Japan and China, one of the goals of the investment is to grow sales in that region.
As for HyLife Foods, Vielfaure said that over the last five years, they have invested heavily in growth at the plant. Going forward, they will be looking for efficiencies and better world-wide markets for the plant’s products.
With the investment in HyLife, Itochu is continuing to develop various kinds of food-related businesses around the world in an aim to achieve the leading position in the international food industry. Last year, after 50 years of partnership, Itoshu purchased Dole’s Asian fresh produce business and worldwide packaged food business for $1.685 billion US.
