Get the purchase price of the Balzac facility right, get the business plan right, get the management team right and the need for government involvement disappears.
The point has been raised about the packing plant industry getting government money in the past as if somehow two wrongs make a right. Reagonomics never worked, in my opinion. The theory that government dollars at the packing plant level will somehow trickle down to benefit the producers is a myth. It is socialism for the rich, free enterprise for the poor. Does it make any difference if the money flows to Cargill/XL or to this proposed startup?
The point has been raised that it is only $20 million so what is the problem. And that there is a long history of government handing money to private ventures such as the magnesium plant at High River. Lets overlook the fact that the magnesium plant never got off the ground. The truth is that with enough government money (bridge financing if you will) behind the project this plant, or any plant, could operate indefinitely. It would take ongoing injections of the $20 million dollar government fix. The Ranchers Beef operation ran up a debt of $56 million and was only in operation a short while. The government backing/money would be required for at least ten years or longer as it would take that long for a naïve management team to go through the required learning curve, develop the required marketing channels and accrue the financial depth to operate without the government umbilical cord. There is a possibility that plant would never be viable without the support of the Province's treasury.
Actually it would be more cost effective in the long term to simply nationalize the Lakeside plant as a going concern and get on with it. Or why stop there? Why not nationalize the Cargill High River plant as well and take over the world beef market? After all, our province has the financial resources to do that. Think of all the money that would trickle down to the producer level.
The point has been raised about the packing plant industry getting government money in the past as if somehow two wrongs make a right. Reagonomics never worked, in my opinion. The theory that government dollars at the packing plant level will somehow trickle down to benefit the producers is a myth. It is socialism for the rich, free enterprise for the poor. Does it make any difference if the money flows to Cargill/XL or to this proposed startup?
The point has been raised that it is only $20 million so what is the problem. And that there is a long history of government handing money to private ventures such as the magnesium plant at High River. Lets overlook the fact that the magnesium plant never got off the ground. The truth is that with enough government money (bridge financing if you will) behind the project this plant, or any plant, could operate indefinitely. It would take ongoing injections of the $20 million dollar government fix. The Ranchers Beef operation ran up a debt of $56 million and was only in operation a short while. The government backing/money would be required for at least ten years or longer as it would take that long for a naïve management team to go through the required learning curve, develop the required marketing channels and accrue the financial depth to operate without the government umbilical cord. There is a possibility that plant would never be viable without the support of the Province's treasury.
Actually it would be more cost effective in the long term to simply nationalize the Lakeside plant as a going concern and get on with it. Or why stop there? Why not nationalize the Cargill High River plant as well and take over the world beef market? After all, our province has the financial resources to do that. Think of all the money that would trickle down to the producer level.
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