Vegetable producers in Manitoba have been dealt a huge blow when a Portage la Prairie vegetable processor was forced into receivership late last month.
News of Canadian Prairie Garden Puree Products’ (CPG) financial predicament was bad enough, but also comes at the worst possible time, said Garry Wiebe, who farms with his son north of Winkler and whose farm listed as unsecured creditors in court documents March 22.
The accounting firm Meyers Norris Penny was appointed receiver March 22 for the processing plant that’s operated for five years at the Food Development Centre. It uses a state-of-the-art steam infusion cooking process to aseptically package fruit and vegetable purées for the food ingredient industry.
Growers like himself are just days away from beginning to start transplants, and are now out of pocket for seed and other inputs purchased for this year, Wiebe said.
“I’ve already spoken to one grower who is contemplating bankruptcy,” he said March 30. “I don’t think that’s going to be in every case but it’s certainly going to set everyone back.”
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Their predicament includes being left with no market for acres they’d dedicated to supply CPG in 2017, he said.
“We’ll be scrambling about what to do with them. We don’t really know at this point. It’s tough to find a replacement on this short notice.”
It was, indeed, short notice. Wiebe said news the company was in financial trouble really came out of the blue.
“We’ve certainly had some questions sometimes,” he said. “But we just believed that everything was fine.”
Wiebe said growers are also owed considerably more than what court documents indicate as outstanding invoices owed them.
“There’s about eight or 10 farmers on that list who haven’t been paid,” he said. He didn’t have precise numbers as of last week but the amount could be about $1.5 million between them.
“We’re trying to get accurate information,” he said. “I’ve asked the growers to send me their real numbers and already it’s quite a bit higher than what’s on the list.”
In court documents detailed secured creditors are owed a total of just over $6.1 million, with unsecured creditors owed just over a further $3.6 million, for a total of $9,783,270 of liabilities.
What’s owed farmers doesn’t even include their significant investments made over the last couple of years in specialized washing and harvesting equipment, and in farm buildings bought and built to service this business, said Wiebe.
“I know a guy who built a greenhouse and spent over $100,000. I know one farmer who’s spent about $70,000 in equipment that’s now useless to him,” he said.
“The real cost on the farm is higher. You can always sell some of that equipment, of course, but a lot of this specialized equipment goes down in value pretty quickly. ”
The impact of this will be felt well beyond the farm gate too, he continued. On their own farm they won’t be able to offer near the hours they’d hoped to between 20 to 30 people they’d planned to hire, and other growers will face the very same thing, he said. Plus, there’s lots of trades people and other service providers to farms that won’t get paid.
“It’s going to hurt everyone at every level,” he said. “It’s not just farmers. It’s the electrician, the plumber who isn’t going to get his money.”
At least 10 employees at the processing facility, housed in the Food Development Centre, were also given layoff notices on March 22.
Wiebe would not speculate how many acres would have been dedicated to production for CPG overall. Their only recourse may be to sow them to a commodity crop like wheat this spring. “And these were high-value acres,” he said.
However, last week intense discussions were also underway about the potential for growers to assume ownership of the company.
“We’ve been meeting,” he said, adding he’d like to hear from potential investors in such a venture too.
“We would like, if it’s going to be sold off, to keep it going here in Manitoba, if possible,” he said. “If we can have some part in that as growers, in part ownership, we’d be very interested in that.”
However, the window of opportunity for that to happen is exceedingly small, and if things don’t move quickly a whole year of production is at risk of being lost, he added.
“Spring is coming very, very quickly.”
They’ve relayed their predicament to both provincial Finance Minister Cameron Friesen and Manitoba Agriculture Minister Ralph Eichler and to Candice Bergen (MP Portage-Lisgar), Wiebe said.
When CPG was launched in 2012 it was as the first project in Canada to receive a $2.5-million repayable federal loan under the former Harper government’s Agricultural Innovation Program. The company was recognized as a promising venture for job creation in the processing sector, while creating new markets for Manitoba-grown fruits and vegetables.
The business has been widely recognized for innovation and has received numerous awards for its product.
Reached by email, Kelly Beaulieu, the company’s founder and chief operating officer, said she could not comment further on CPG’s situation, except to repeat her hope that the business will prevail.
“The only other thing that the company can say is we are ‘hopeful’ the ‘business’ will be back in operation as soon as possible,” she wrote in an email March 31.