Manitoba_Rancher
Well-known member
Beef company blitzes Manitoba 02.10.2005
By Jay Whetter
Two representatives from Canada Farm Direct were in Manitoba last week to drum up support for their ambitious beef processing and retailing plan.
The new company wants to raise at least $30 million from producers across Canada as startup money to buy an existing large-scale slaughter and processing plant in Western Canada, and then branch off into more plants and retailing.
Dale Mather (shown at left in the photo above), president and CEO, and Dennis Duncan (at right), vice-president of marketing, say they have had great support from producers in Alberta and Saskatchewan, and are just now getting their message to Manitoba.
The plan is to take over one of the three largest processors in Western Canada. Mather and Duncan cannot specify which one it is for securities purposes, but they will soon release to potential investors a detailed business plan that outlines the specifics.
Step two is to take over another existing slaughter plant and convert it to handle beef.
The combination of the two plants will have a slaughter
capacity of one million head per year, including 400,000 of new beef capacity. Canada currently slaughters three million to four million head.
Duncan, a cattleman from Red Deer, said Canada Farm Direct originally thought they might build a new plant, but then realized taking over an existing plant was the best way to get started.
“The existing plant has huge international markets already established. And we don’t have to wait two or three years to get a plant built and running,” Duncan said.
The whole initiative, including plants, retail outlets and startup operating capital, amounts to $180 million.
So far, they have raised over half of the $30 million investment they want from producers by April. Duncan said that once they have the business plan in place, he expects a flurry of investors to come forward.
Producers have three choices for investment:
• A $100,000 dividend-producing share guarantees 850-head annual slaughter, and for every additional $10,000 they get another 85-head annual slaughter for life.
• A $10,000 dividend-producing share guarantees 50-head annual slaughter for life.
• A $500 dividend-producing share puts you in the queue after the guaranteed slaughters have been honored and a $500 annual registration has been paid.
Mather and Duncan bill Canada Farm Direct as the only Canada-wide plan with the economies of scale to actually compete with multinational packers.
“Without economies of scale, smaller outfits are at risk of not surviving under a normal market situation,” Mather said.
Mather and Duncan met with David Reykdal, president of Ranchers Choice, which has plans to build a cull cow plant at Dauphin. Mather and Duncan would rather see Ranchers Choice members divert their investment and their cows and cattle to a Canada Farm Direct plant rather than build their own plant.
If Ranchers Choice does build the plant, then Canada Farm Direct would like to form a supply chain alliance with them.
Reykdal says he will reserve comment on the idea until he has a chance to go over the proposition with his membership.
He does like the general Canada Farm Direct concept. “It retains ownership in Canada, which keeps the profits in Canada.”
Canada Farm Direct is also working on a supply alliance with Natural Valley, which already has two plants operating in Saskatchewan.
While in Manitoba, Mather and Duncan also met with Manitoba Cattle Producers Association and with Manitoba Agriculture. They are not looking for government money, but they want government people to be familiar with the plan.
Like most of these new slaughterhouse initiatives, Canada Farm Direct is leaning on producers to take hold of their industry.
“Producers, if they want to help the industry, this is their chance to take action,” Duncan said.
By Jay Whetter
Two representatives from Canada Farm Direct were in Manitoba last week to drum up support for their ambitious beef processing and retailing plan.
The new company wants to raise at least $30 million from producers across Canada as startup money to buy an existing large-scale slaughter and processing plant in Western Canada, and then branch off into more plants and retailing.
Dale Mather (shown at left in the photo above), president and CEO, and Dennis Duncan (at right), vice-president of marketing, say they have had great support from producers in Alberta and Saskatchewan, and are just now getting their message to Manitoba.
The plan is to take over one of the three largest processors in Western Canada. Mather and Duncan cannot specify which one it is for securities purposes, but they will soon release to potential investors a detailed business plan that outlines the specifics.
Step two is to take over another existing slaughter plant and convert it to handle beef.
The combination of the two plants will have a slaughter
capacity of one million head per year, including 400,000 of new beef capacity. Canada currently slaughters three million to four million head.
Duncan, a cattleman from Red Deer, said Canada Farm Direct originally thought they might build a new plant, but then realized taking over an existing plant was the best way to get started.
“The existing plant has huge international markets already established. And we don’t have to wait two or three years to get a plant built and running,” Duncan said.
The whole initiative, including plants, retail outlets and startup operating capital, amounts to $180 million.
So far, they have raised over half of the $30 million investment they want from producers by April. Duncan said that once they have the business plan in place, he expects a flurry of investors to come forward.
Producers have three choices for investment:
• A $100,000 dividend-producing share guarantees 850-head annual slaughter, and for every additional $10,000 they get another 85-head annual slaughter for life.
• A $10,000 dividend-producing share guarantees 50-head annual slaughter for life.
• A $500 dividend-producing share puts you in the queue after the guaranteed slaughters have been honored and a $500 annual registration has been paid.
Mather and Duncan bill Canada Farm Direct as the only Canada-wide plan with the economies of scale to actually compete with multinational packers.
“Without economies of scale, smaller outfits are at risk of not surviving under a normal market situation,” Mather said.
Mather and Duncan met with David Reykdal, president of Ranchers Choice, which has plans to build a cull cow plant at Dauphin. Mather and Duncan would rather see Ranchers Choice members divert their investment and their cows and cattle to a Canada Farm Direct plant rather than build their own plant.
If Ranchers Choice does build the plant, then Canada Farm Direct would like to form a supply chain alliance with them.
Reykdal says he will reserve comment on the idea until he has a chance to go over the proposition with his membership.
He does like the general Canada Farm Direct concept. “It retains ownership in Canada, which keeps the profits in Canada.”
Canada Farm Direct is also working on a supply alliance with Natural Valley, which already has two plants operating in Saskatchewan.
While in Manitoba, Mather and Duncan also met with Manitoba Cattle Producers Association and with Manitoba Agriculture. They are not looking for government money, but they want government people to be familiar with the plan.
Like most of these new slaughterhouse initiatives, Canada Farm Direct is leaning on producers to take hold of their industry.
“Producers, if they want to help the industry, this is their chance to take action,” Duncan said.
