|Brooks Plant Under New Management|
|Written by Neil Billinger|
|Wednesday, 17 October 2012 21:27|
XL Foods is handing over the management of its troubled Brooks, Alberta beef processing plant to a multi-national company.
JBS USA, a wholly owned subsidiary of Brazil-based JBS S.A., will manage the plant which temporarily lost its license on September 27. It was yanked by the Canadian Food Inspection Agency (CFIA) following a massive beef recall due to several E.coli cases. The CFIA is expected to issue a report within a few days to determine if the facility can reopen.
"This action is another positive step to relicensing the XL Lakeside beef plant in Brooks, Alberta," said XL Co-CEO Brian Nilsson in a news release. "We welcome the assistance of JBS and their resources."
As part of the agreement, JBS USA holds an exclusive option to purchase XL properties including: the Lakeside beef packing plant, a beef packing plant in Calgary, a feedlot in Brooks and the adjacent farmland acreage, a beef packing plant in Omaha, Nebraska and a beef packing plant in Nampa, Idaho.
Upon exercising the option, JBS USA agrees to pay $50 million U.S. cash and $50 million in JBS S.A. shares.
The company also says in its news release that ''under no scenario will JBS USA assume any XL Foods' debt or liabilities." This is important because the company could face potential losses from consumer legal action.
Brad Wildeman is the President of Pound-Maker AgVentures, a major cattle feedlot and ethanol plant near Lanigan, SK.
"These guys run operations around the world. They certainly know a lot about food safety because they operate facilities in the United States, which has similar regulations to (Canada)."
JBS USA has eight beef processing plants, three pork processing plants and 31 poultry processing plants in the United States, Mexico and Puerto Rico. The parent company has 301 production facilities globally.
Wildeman says its very important to get the Brooks plant up and running as soon as possible.
"We can't live without that plant. We need to have it up and operational. There are more cattle than one plant can process. (Cargill at High River, Alberta) Secondly, we need the competition and the competive bidding."
Cattle are moving to processing plants in the United States, but Wildeman says there is a shortage of trucks and some U.S. plants only slaughter Canadian cattle on specific days.
|Last Updated on Wednesday, 17 October 2012 22:00|