Pork processor Central Canada Foods Corporation has reported sharply lower profits for the year to 31 October 2004, despite record sales growth.
Total sales for the period were CAN$22.01 million, compared with $17.29 million the year before, but income for the period fell to $154,067 from $359,491.
The increase in revenues was due to growth in export sales, primarily in the Asia Pacific market, the company said.
In order to handle the growth of its ‘Choice Pak’ brand the company has committed to lease a larger, more efficient plant, with an option to purchase the facility outright.
“As part of a successful growth strategy to generate new customers and increase sales to existing customers, Central Canada took on additional sales at smaller margins in anticipation of the move to the larger plant,” it said. “The Company deliberately booked these additional sales to ensure that the new facility, with its projected lower operating costs, will be profitable from the start.”
Volatility in raw material costs contributed to an increase in the cost of meat products and labour, it said. Avian flu in poultry in Asia and BSE in beef triggered increased demand for pork, causing spikes in the price of the wholesale cuts used.