The largest greenhouse tomato producer in Quebec, Savoura, has become insolvent and has to sell their greenhouses and trademark.
Their major creditors asked the Court to appoint a receiver under the Bankruptcy and Insolvency Act on Thursday. Raymond Chabot was chosen to initiate an assets sales process to allow the secured creditors, the Banque Nationale and Banque Royale their guarantors. “The main assets are the three greenhouses, the Savoura trademark and the stocks” explains Jocelyn Renaud, Associate at Raymond Chabot and appointed receiver. “We are making sure at the same time that production and distribution activities continue” says Mr Renaud. He began meeting with the employees yesterday to explain the situation. There are almost 200 employees in total.
“We must continue to deliver and produce a quality product so that people who consume Savoura tomatoes still have quality products. Savoura is a good brand. It’s a good product. It was a good achievement, we must ensure that it continues.” The receiver’s aim is to find a buyer who will continue the activities.
It was rumoured last January that Ontario’s Mastronardi Produce was about to buy the Quebecan group, which produces about 40% of greenhouse tomatoes in Quebec. Mr Renaud says that they will definitely be amongst the people they will solicit, as it is likely Savoura’s Quebecan competition will also be solicited, they will not limit themselves to only finding investors in the Quebec area.
Savoura was set up 25 years ago, and has lost 6 million over their last two fiscal years. They owe 20 million in total to their creditors: 10 million to the Banque Nationale and 6 million to the Banque Royale. Investissement Quebec lent them 1.4 million and invested 1 million in share capital in the company.
According to André Mousseau, President of the Greenhouse Producers Union in Quebec, producers in the area have fought competition from tomatoes from Mexico and Ontario. He says that “Mexico sends us low price tomatoes every winter and our big markets do not buy what is best, but what is cheapest”. He believes that the unfortunate experience with Mexico weakened the company. In 2010 Savoura had invested 2 million to produce in Mexico. They closed up shop less than two years later. “With the surplus electricity we have in Quebec, I do not understand why the government doesn’t offer a lower rate to greenhouse producers to let them catch up with Ontario” says Mr Michaud.
The Saint Laurent greenhouses were founded in 1988 and own the brand Savoura. They have three greenhouses and about 200 employees. They lost 6 million over a two year period. Their installations cover about 11 hectares and they represent about 40% of greenhouse tomato production in Quebec.