Japan Presentation-Chad Coleman P.J. Impex

March 7, 2012

Good evening. It is very much an honour to be before you here tonight and to be invited to make a brief presentation on Canadian Pork Exports.

It is worth making clear that I am not a Canadian Government or Industry representative rather I am an independent businessman engaged in international trade since 1988 so that all comments expressed here are mine alone and from my own perspective.

With that in mind and in the interest of providing you with some background information – it is useful for me to say a few words about myself and P.J. Impex.

My name is Chad Coleman. Born and raised in Montreal, Canada. I attended McGill University and upon graduation worked a few years in the shipping industry. In 1988, I entered the world of International Trade and became part of the creation of P.J. Impex inc. For 24 years I have been the owner and President of P.J. Impex and we look forward to next year when we will celebrate 25 years in business. A milestone that I take great personal pride in.

Over the years P.J. Impex has built itself into one of Canada’s leading exporters of pork, poultry, fruits and vegetables. Exports of Canadian Pork constitute approx 60% of our corporate sales turnover with exports to over 30 countries worldwide. We believe that our ongoing success is built upon our strong reputation for reliability and integrity in the face of a whole range of trade challenges-shipping, market access, documentation, price fluctuations and exchange rate movements just to name a few......

As for Canadian Pork- I am certain that over the years you have heard various presentations extolling the virtues and benefits of Canadian Pork such that a full repeat is not necessary. However- to make a few brief points:

-Canada remains the 3rd largest Pork Exporter in the world exporting to over 100 countries worldwide with a presence here in Japan for over 40 years.

-The hog profile between Canada and Japan is similar. Breeds, birth to market timeline, # of producers, # of farms and the feed used. All similar...

-As for Canadian Pork production- industry consolidation and production cut backs have stabilized since 2009. The 2011 slaughter level of 20, 275,000 head is pretty well identical to the 2010 level of 20,292,000 head which is a solid 30% down from the 2009 level of 29.5M head. Actual pork production which came in 1.9M tons in both 2010 and 2011.

The key statistic is the 1,151 274 tons of Pork that Canada exported in Jan-December 2011 period. Which December indicates an approximate 4.88% increase on the 1,094,694 tons exported on 2010. The key point to be emphasized here of course is that Canada exports over 50% of its total Pork Production. The importance of export markets for the Canadian Pork Industry cannot be over stated.

On the screen are some comparative figures for our key export markets. Full 2011 year to date statistics have just been released by Agriculture Canada. I will address most of these markets with some comments as we are actively trading Canadian Pork into all of them:


USA Remains the largest export market for Canadian Pork. Given the close geography and interdependence in the two economies it is easy to understand. Tonnage shipped is down approx 7% primarily due to the the ongoing strength of the Cdn$ versus the US$ and economic difficulties in the American economy.


Exports to Australia were down a good 25%. Mostly attributed to competition from the USA who tend to use Australia as a release market for excess production. This scenario along with increased competition from Europe is expected to continue in 2012.


In 2011, Russia was the 3rd largest export market for Canadian Pork with especially strong movement in the 2nd half of the year. 2012 on the other hand seems to be a different story. With Russia expected to enter the WTO this year and the introduction of country non specific quota- the Russian market is more unpredictable than ever. The main factor so far has been competition from Europe with the lower value of the Euro. The first round of quota usage appears to have been more heavily weighted towards European pork to the exclusion of Canadian Pork purchases. It will be interesting to see the Jan-March 2012 statistics when they are released as I suspect they will be down...

South Korea

Along with China- exports to Korea boomed substantially in 2011 due to the Foot and Mouth outbreak. However- 2012 brings new challenges as Korea has concluded Free Trade agreements with the USA, the EU and Chile to the seeming exclusion of Canada. This is potentially or I would say likely a big loss of a key export market for Canadian Pork and an issue that the Canadian Government needs to act quickly on and is being pressured by Canadian industry to do so.


With most Canadian plants approved and signing export documents for direct PRC shipments and the well publicized shortage of pork in China- Canadian Pork exports to China surged to unprecedented levels in 2011 as you can see by the statistics. This was also the case for all other Pork exporting countries. China was ‘the story’ in 2011 and along with Korea the main reason for higher prices through the year. As for 2012 going forward post Chinese New Year we have seen somewhat lower demand and lower prices however China is still expected to remain an attractive volume market. The looming issue and primary industry concern remains the Chinese authorities implementation of a ‘zero tolerance’ policy with regard to the use of ractopamine. It remains somewhat unclear how this will play out in 2012 and bears close attention for all parties.


The Philippines has been a bit of a steady growth market the last few years but took a step backwards in 2011 and this trend is continuing so far in the first 60-90 days of March 2012. The Administrative Order AO-22 which aims to restrict frozen pork imports while not yet passed by the Philippine government remains a definite impediment to smooth trade. Both the Canadian and American governments are trying hard to resolve the issue with the Philippine government but we have yet to see the positive results from their efforts.


As you can see from the statistics- Japan remains the #2 export market for Canadian Pork with 313,215 metric tons shipped up to the end of December with the split approx 30% fresh and 70% frozen. The $ value came in at $893M which is approx 5% above the previous 3 year average of $850M. The volumes are down approx 7% which for obvious reasons is not surprising. As for 2012- the challenges will be to remain price competitive in the face of strong competition from alternative supply sources and battle to keep and grow our market share. Not an easy job but given the long, successful history of Canadian Pork in the Japan marketplace- an attainable objective for sure.


To summarize briefly- Canada will continue to be a leading pork exporter to both Japan and other key markets but it will have its challenges going forward in 2012...... Lower sales into Korea, more normal demand from China, uncertainty in Russia and ongoing Exchange Rate fluctuations will need to be followed ever more closely.

I would like again thank you for your time and invitation to speak here today and trust that the presentation has been of interest to you.

Thank you.