The board of Rancher’s Choice Beef Co-op has decided to forge ahead with plans to build a cull cow slaughtering plant near Dauphin, Man., even though the Manitoba government rejected a second funding proposal, citing lack of producer commitment.
Rancher’s Choice president Bob Munroe said that at a Dec. 28 meeting the board was unanimous in its decision to continue with the project.
“The board is still behind the plan. We have another potential investor that we will be trying to develop,” he said.
In a conference call on Dec. 21, agriculture minister Rosann Wowchuk told reporters that under the co-op’s proposal, the province would have ended up guaranteeing 100 percent of the private sector lending.
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“We do not want to be the owner of this facility,” she said. “We looked at the term sheet and it was one that we could not endorse.”
With just 9,000 animals per year committed to the project, Wowchuk said the group had fallen far short of the 80,000 needed to make it viable.
“That’s nowhere near enough animals for this facility to operate.”
The co-op has been working for three years on a financing package to build a $38 million cattle slaughtering plant in Dauphin. An earlier package from a French lender was rejected by the board last summer.
While the province had approved $4.5 million in equity and $10 million in loan assistance for the project, the co-op was looking for $18.5 million in total equity from the province to secure $17 million in private
financing.
“Our government is still committed to slaughter capacity. We are not taking our money off the table,” said Wowchuk.
She added that 16 financial institutions had looked at the Rancher’s Choice business plan and none of them wanted to get on board.
The plant, if built, would be the province’s only large scale federally inspected plant, killing up to 330 head per day, mainly cull cows.
