Anew beef slaughter facility is still on track to open in Winnipeg in 2012, despite losing $10 million in funding from the federal government.
“We’re as anxious to get out there and make an announcement as anyone else, and we hope to soon. Everyone is kinda anxious,” said David Wiens, a director with the Manitoba Cattle Enhancement Council (MCEC).
Keystone Producers Ltd. and the MCEC were blindsided in late July by the federal government’s decision to withdraw $10 million in financing it promised the beef-processing company in 2009 under the Slaughter Improvement Program (SIP). The money was earmarked for the development of the Marion Street processing plant.
The funding instead went to an expansion of Hylife Foods Ltd.’s hog-processing facility in Neepawa. The former Springhill Farms facility is now owned by Hytek Ltd., which will use the money for upgrades to the wet area, expansion of the cooler and cutting areas, and new equipment.
At the time, the federal government cited unspecified problems with Keystone Producers Ltd.’s business plan. Wiens said MCEC still has not received an explanation for why the funding was pulled.
“It’s a niche plant, it’s not going to be a Cargill, and maybe that is what they were looking for,” he said. “But our plan has been getting a lot of positive feedback from the producers, and our potential customers.”
Market research done by the Astana Group on behalf of Keystone Producers Ltd. had identified a need for a slaughter plant specializing in halal and kosher products, with a capacity of 250 to 300 head.
Wiens said $18.2 million in private-sector funding has already been secured, and that the company’s management team is now seeking funding to replace the $10 million lost when the federal government pulled out. But he added it’s too soon to say where that additional funding might come from, or whether it would be from a public or private source.
“At this point, it’s been a long time in the making … but we’re talking about a delay of months, not years,” said a confident Wiens.
Formed following the BSE crisis five years ago, the MCEC is financed through a voluntary $2-per-head checkoff on cattle sold in Manitoba, which is then matched by the provincial government. Producer-owned Natural Prairie Beef Inc. joined with MCEC in 2008 to create Keystone Processor’s Ltd.
Manitoba Beef Producers says it will revisit its call for an end to the $2 checkoff, if the Marion Street plant becomes viable, but isn’t optimistic.
“My opinion remains the same if the MCEC doesn’t get results,” said MBP president Major Jay Fox. “We expect the MCEC to get results, they’ve had five years to work at this.”
But Fox added that he is pleased to hear the organization may now be looking to the private sector.
“I think that if they are going down a different path to get funding from the private sector, that that is the right path,” said Fox. “It has to be commercially viable.”
Wiens remains strong in his conviction that a federally inspected plant will provide benefits to Manitoba beef producers through reduced transportation costs and as a local outlet for beef cattle if the border closes.
“There is obviously demand out there, the potential consumers are worldwide, including the U.S.,” said Wiens. “The multinationals aren’t interested in doing this sort of work and we can benefit.”
shannon. vanraes @ fbcpublishing.com
“Atthispoint,it’sbeenalongtimein themaking…butwe’retalkingabout adelayofmonths,notyears.”
– David Wi Ens