The people who run Harvest Meats, of Yorkton, Sask., think their decision to sell to Fletcher’s Fine Foods will help Harvest to grow.
Fletcher’s announced last week it is buying Harvest. The deal involves the exchange of shares and money, but details were not disclosed.
Harvest employs about 115 people making sausages, luncheon and smoked meats.
It will stop hog slaughtering and get all its carcasses from Fletcher’s plant in Red Deer, Alta., which has boosted production through a second shift that began Dec. 4.
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Walter Bauer and Kenn Propp, the owners of Harvest, will stay on as managers for at least three years.
Bauer said the deal began through discussions with Saskatchewan Wheat Pool, majority owner of Fletcher’s and the developer of several large hog barns through its Heartland Livestock arm.
“Off and on we were having problems getting hogs. Also, we find it tough to do the costing on hogs … it was always a guessing game,” Bauer said.
“It was a $5 million part of our business, but it was something we couldn’t control.”
Harvest wanted about 700 hogs a week, but sometimes would fall short by 100-150 head. When Saskatchewan’s hog board, SPI Marketing, announced earlier this year it had signed an exclusive supply agreement with Intercontinental Packers in Saskatoon, the prospect of hog supply became even more complicated, he said.
From Fletcher’s point of view, the deal will mean more of its expanded slaughter production will be processed within the company, said Greg Whalley.
“We expect the Harvest acquisition to add approximately $20 million to our sales next year.”
Harvest will continue to use its brand names and might use Fletcher’s marketing structure to expand sales into the United States.
Harvest is also looking into expanding production and has acquired land for that purpose.
