If Calvin Vaags has his way, Manitoba will have a federally inspected ruminant slaughter plant capable of handling 1,000 head per week up and running within a year.
After three years of preparation, work has started on a $13-million expansion at Plains Processors, a small processing plant with a capacity of 80 head per week located between Carman and Elm Creek. Vaags purchased the plant in 2008.
The revamped facility is expected to employ 80 workers and provide export-certified processing to the province’s cattle industry as well as to producers of other ruminant species.
“We haven’t done sheep on a large scale yet, but if I look into the future, I see the sheep industry in Manitoba really growing and again, no place for them to process locally and they have a huge freight bill going east,” Vaags said in an interview as his investors and elected officials from three levels of government gathered at the site Jan. 26 to wish him well.
“We think we can probably fit into that market as well. Our plan is to not close doors on anything,” he said. “We are building this plant as a multi-species plant.”
Vaags, who operates a grain farm and cattle feedlot near Oakbank, entered the retail beef business when he opened the Carver’s Knife outlet in Winnipeg in 2004. He later expanded to a second retail outlet and started supplying Manitoba beef by wholesale. He said he’s been working on achieving federally inspected status for Plains Processors for the past three years.
Vaags acknowledged his isn’t the first attempt to bring federally inspected slaughter capacity back to the province in the wake of the 2003 BSE crisis, which disrupted export access for live cattle for years.
Despite provincial government backing, a producer co-op was unsuccessful in starting a cow slaughter facility near Dauphin. Another proposal, also backed by the province’s Manitoba Cattle Enhancement Council, was to rehabilitate a mothballed hog slaughter facility in Winnipeg. It has been in limbo since the federal government withdrew $10 million it promised the project in 2009.
Vaags said there are several elements of his project — scale, location and private-sector investment — that give it a better chance of success.
“The type of plant that we plan here hits a sweet spot,” he said.
“I’ve said from Day 1 we need a plant but we need to be careful how we do it. You can’t go too big because you have to learn to walk before you can run. If you are too small the mechanics and economies of scale don’t work.
“The point here is to really do it on a shoestring and get it up and running and make a business that is really mean and lean and get going from there,” Vaags said.
The project is an expansion of a plant that’s been in operation since the early 1950s at a site that is centrally located in a rural area “where the community is welcoming to it,” Vaags said, noting Winnipeg-based slaughter proposals are a harder sell with surrounding residents.
As well, nearly half of the company’s financial resources are coming from private investors in addition to federal and provincial support and commercial borrowings, he said. “There is actually five different financial components putting this together,” he said.
While Candace Bergen, MP for Portage-Lisgar, and Manitoba’s minister of agriculture, food and rural initiatives Ron Kostyshyn attended the pseudo-sod turning, neither disclosed the level of support their governments are offering.
Vaags said the final details are still being ironed out, but commitments have been made.
The federal government announced in March 2011, it is committing $2.8 million in repayable contributions to the project through the Slaughter Improvement Program. The Manitoba Cattle Enhancement Council (MCEC) gave a conditional approval of $920,000 to the project in 2011.
Kostyshyn confirmed talks between Vaags and the province are “in the final stages.”
He said freight costs alone should be enough to make a local facility attractive to Manitoba producers. “There will potentially be a cost saving to producers who are finishing animals in Manitoba,” he said.
Manitoba Beef Producers president Ray Armbruster said his organization welcomes the addition. “We like this initiative with some private initiative and investment, and we support it going forward in that way,” he said.
Armbruster said the scale of the facility won’t be attractive to a 20,000-head feedlot but it will give cow-calf producers or small-lot finishers another option for adding value to their cattle.