PEI Seeks Buyer For Atlantic Beef

[smcgrath76]

Ongoing cash losses with no end in
sight at Atlantic Beef Products have
led the Prince Edward Island government
to seek private-sector buyers, CBC
reported Thursday.

The broadcaster said the packing plant,
which has lost money since it opened in
late 2004, is now losing cash at the
rate of $200,000 to $300,000 a month,
for a total loss of about $30 million.

"We still have enough revenue stream to
sustain the plant for another three to
five months, but when that money's
burned through, then we are going to
have a major challenge at that point in
time," provincial Agriculture Minister
George Webster told CBC.

The province, he said, has been in
contact with about a dozen private
investors to see if any would like to
buy the Maritime provinces' only
federally-inspected beef slaughter
plant.

The P.E.I., Nova Scotia and New
Brunswick governments had each agreed
to kick in $2 million in late 2007 for
a bailout for the facility, which is
co-owned by beef producers and the
P.E.I. government.

Their contributions were part of an
agreement that included a $6 million
investment from the federal Atlantic
Canada Opportunities Agency (ACOA), but
that contribution was rejected when
ACOA in early 2009 changed its pledge
from an investment to a loan.

No one wanted the liability of such a
loan, so it was never accepted, Webster
told CBC.

The Atlantic Beef plant was founded by
the Borden Carleton Atlantic Beef
Products Society, a regional beef
producers' co-op. Webster told CBC the
plant will need to find a niche market
if it hopes to make money.

[farmers_son]

See Atlantic Beef Products web site at:

http://www.abpi.ca/history2.htm

I was hoping they would have posted some financial statements but could see none.

As the only federally inspected plant in the Maritimes it would have seemed this should be a going concern. I do not know what the problem is... why they are bleeding cash.

I thought Atlantic Beef was doing some things right and hoped with enough support it would fly.

Are there any producer owned plants left or are they all gone?

[Eastcoaster]

We here in the Maritimes are trying to figure out why it didn't succeed as well, I guess poor management is some of the problem. The most recent manager was looking like he may be able to turn things around but then had a dispute with the feds over the latest money turning out to be a loan rather than a grant which it looked like it was going to be in the beginning and he left the company. Running without a permanent manager at the present time. What may be the largest problem is a plant that size just cannot break into the straight commodity beef market. We don't have a sufficient volume to meet the requirements of our two main grocery retailers and the Cargill's and Tyson's of the world don't want to have just only a portion of the market into the region. Co_op Atlantic was a partner in the plant at the beginning but dropped out because it was having it's own problems back awhile ago competeing with Sobey's and Loblaws. It to only has markets in the rural regions, not in the larger urban areas.We are in desperate need here in the Maritimes for something positive to happen soon or beef as any sort of a viable industry is going to be gone. It did touch a nerve here in the last week or so with producer's and consumers alike to here that Montanna beef is being carried in the Atlantic Superstores (Loblaws) all the way down here. It has been suggested here one solution for the plant is to come up with some sort of a product that is seen as a premium product, which it may be, classed as natural, hormone and antibiotic free. I believe it may be a good idea. With the region only as large as it is and a very limited number of live animals being imported into the area, better control could be had managing a branded product. However with what the producer's endured over the last number of year's, not too many are willing to try something new.

[SimplyCanadian]

Interesting LOBLAWS would import Montana beef, when it clearly stated that it would carry Canadian product whenevr it could be sourced in Canada, shame on you Allan Leighton and Galian Weston.