France's pork processing sector is set for further consolidation with Brittany co-operatives, Cooperl and Arca, mulling a possible merger.

"Merger is only one of a number of options we are discussing with Arca, others being along partnership lines. But at this stage nothing has been decided between the two parties and we continue to meet on a regular basis," Cooperl's managing director Emmanuel Commault told just-food. "We expect that an agreement of some sort will be reached during the current year."

Commault said that a merger would result in a significant reduction in operating costs.

"We estimate economies of between EUR5m (US$7.7m) and EUR10m annually. Our export activities could also be consolidated through a merger," he added.

Cooperl, which employs 2,600 staff and processes around 4m pigs annually, posted a 2007 turnover of EUR1.05bn. However, crisis conditions in the sector saw the co-op's net income reduced from EUR13.4m in 2006 to EUR7.5m last year.

For its part, Arca, a subsidiary of the Terrena Group, has an annual turnover of EUR400m.