Federal budget breathes new life into Brussels beef packing plant idea

Sunday, February 8, 2009

© AgMedia Inc.

by GEOFF DALE

Industry insiders say a $50-million provision in the recently announced federal budget for the expansion of Canadian slaughterhouses could offer support for Ontario facilities but specific details are needed.

While the federal money appears to be directed toward existing facility upgrades, Huron Business Development Corporation’s Paul Nichol says he’s encouraged that it may represent new life for a proposed beef-packing plant in Brussels.

“Two years ago we got just so far with our proposal when we were told the BSE crisis was over, U.S. borders were re-opened to Canadian cattle and it was felt there was more than enough slaughter house capacity in this country,” says the corporation’s economic development manager.

Nichol says while $50-million may not be that much money, it’s a sign Ottawa is considering re-investing in slaughter facilities.

Coupled with the handling problems American plants are experiencing with Canadian beef because of the country of origin labeling controversy and the threat of rising protectionism in the U.S. under the Obama administration, he says there may be enough reason to rethink the Brussels plant.

After already conducting extensive work on the project including identifying markets, developing a facility blueprint and securing land close to the Brussels livestock yard, Nichols says the next move is to take the idea directly to the investment community.

While the facility – which would see the handling of 12,000 head weekly – would require $12-$15-million in capital venture, he believes the concept has merit if investors can see its viability.

“The next step is to get someone who knows the industry and investment communities to talk it up for us,” Nichols says, adding – “we would try to find a market niche – maybe heading out to Southeast Asia or Mexico, create a market for these cattle that would provide a premium to producers selling to the plant and create 50-60 jobs in the area.”

Meanwhile Arnold Drung, president of Conestoga Meat Packers (owned and supplied by the Progressive Pork Producers Co-Operative) says it’s hard to comment on how federal money would impact the 3P facility in Breslau without knowing exactly what is involved.

With that in mind, he says the company’s industry organization is looking for more details, to determine whether such funds would help the 100,000 square foot facility that processes 14,000 hogs weekly.

“It’s difficult to say whether the federal money is a good thing or not,” says Drung. “It may have so many conditions attached to it that it might not be feasible or realistic.”
If there was money, he says it could be utilized on projects focusing on improved overall efficiency, ultimately resulting in a more competitive operation.

Jeanette Jones, vice-president of communications for Maple Leaf Foods, says she can’t comment on whether federal money would have any impact on the potential sale of the company’s Burlington-based facility “because it would only be speculation.”

Jones says Dec. 31, 2008 was the goal for selling the plant and “the process is still ongoing.”

“It’s up to individual purchasers as to what they deem appropriate and attractive to them.” BF