WINNIPEG, Manitoba—For Congébec, buying Westco MultiTemp Distribution Centres Inc meant an opportunity to expand its reach across the country. For the local Winnipeg, Manitoba market it will mean a service gap (left by a departing player) will be filled.
Based in Quebec City, Quebec, Congébec, which was founded in 1974, offers temperature-controlled storage, distribution and logistics services. The company operates distribution centres in Quebec (located in Sainte-Julie, Boucherville, Manseau, Quebec City and Montreal) and Ontario (Toronto). In February, it acquired Winnipeg, Manitoba-based Westco and its four DCs—two in Manitoba (Winnipeg and Carberry), one in Calgary, Alberta and one in Saskatoon, Sakatchewan.
“It was such a natural move for us to take over Westco,” said Laurier Pedneault, president of Congébec.
“We had expanded out of Quebec to Ontario almost two years ago, and we were looking for some opportunity to go out west and expand the network out to Vancouver. This transaction allowed us to complete the whole country from Ontario to BC. Westco was a family operation, and not-oversized. It was relatively a natural operation for us to take over.”
Pedneault thinks highly of Westco—he pointed out the company was profitable and said Westco’s senior managers have been left in place to operate the business as its own division—but he noted Westco had a slightly different philosophy and approach to business than Congébec employs.
“Westco was, I would say, a good operation, but it was also a regional operation. We could see it had not really been involved very much with the North American market. US operators and the larger Canadian companies are a tight group. Westco was outside of that group. We think there are a few things that can be taken very positively to Westco to make it a more open organization than it was in the past,” he said.
While Pedneault said he is reluctant to make fast, wholesale changes to the business, Congébec is putting its own stamp on the Winnipeg warehouse by spending $6 million to convert a portion of the ambient storage area to freezer space.
“We call it a transformation. There was an ambient area within the 312,000 square foot warehouse. We are transforming that ambient area to a freezer area since the demand is much more interesting and much stronger. Basically we are transforming 15 percent of the total facility to freezer space. With this transformation, some 70 percent of the warehouse will be freezer.
“Westco used to be multi-temp—it’s what they call themselves. We tend to believe ambient does not need to be very significant in the total picture. In our eastern operation we hardly have any ambient area.”
Although Pedneault admits the transformation would have happened at some point in the future, he said it was hastened along due to outside circumstances and market conditions: specifically one of Westco’s existing customers, HyLife Foods of La Broquerie, Manitoba needed to find new freezer space where it could warehouse its frozen pork products.
“We started a negotiation with HyLife on the very same week we acquired Westco because VersaCold had been closing its Jarvis facility in Winnipeg, which was taking care of a substantial volume for HyLife. HyLife was desperate to find space and they were already a Westco customer in that warehouse. So we got to know each other very quickly. Right now we are handling their volume out of that Winnipeg warehouse.”
According to Pedneault, having access to the additional freezer space will mean HyLife will be able to increase its production levels.
“With the expansion of our frozen storage area, HyLife expects to produce 6,200 pigs per day. Our refrigeration system will have the capacity to freeze eight additional containers of fresh pork every day, representing 400,000 pounds of meat. We will now be equipped to perform at least six trichinella treatments, allowing for export to Russia and Eastern Europe. In total our Winnipeg facilities will ship 15 containers of pork daily around the globe.”
The Canadian Food Inspection Agency defines “trichinellosis (trichinosis) as a disease that can affect both animals and humans. It is caused by small nematodes (roundworms) of the Trichinella species. Infective larvae are transferred (from host-to-host) by the consumption of raw or undercooked infected meat.
“In many countries human trichinellosis has been associated with the consumption of improperly or uncooked meat from infected swine. Regulations to detect and control trichinellosis in swine have been in place in many countries for more than 100 years.”
Pedneault said that HyLife currently performs its trichinella treatments in Montreal, so being able to offer the same service in Winnipeg simplifies things.
Renovations will only occur in the building’s interior. There are approximately 40 dock doors in the DC, and that number will not change. Instead, six or seven will be devoted exclusively to serving HyLife’s needs.
Pedneault described HyLife’s inventory as being very quick to turn over, so he expects to see more truck traffic at the warehouse. But since the company has extra land at the facility, he said there will be ample room for parking.
The transformation is expected to be completed by mid-December with operations ramping up very quickly after that. Since the DC already handles HyLife products, current staff members are already familiar with the company’s procedures and will be able to train the six or seven new employees Congébec hires.
As for Congébec’s next steps and its plans for Westco, Pedneault says stay tuned.
“We are certainly looking at the market, which seems to be very strong in this area. As I told you, we have land we can build on, on that very same site. So it should not be a very big surprise if we make an announcement in the next six-to-twelve months that we are putting up a new facility in Winnipeg.”