TREHERNE, Man. – About five years ago, people in this central Manitoba town lost money when an organ factory broke its promise to locate here.
So when a group of farmers went knocking on doors to find investors for a 600-sow, farrow to finish hog barn, they did things right.
“Everybody wanted to know and understand what we were doing, and … we just took the time and did it,” recalled Herb Watson, president of Norfolk Stock Producers.
The farmers approached potential investors individually to explain the project benefits. They met with town and rural councils and got the news out before coffee row could.
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No visitors allowed
The farmers recently held an open house at the barn. Their management company, Saskatchewan-based Quadra Group, will soon move sows in, and then only staff, vets and the occasional banker will be able to go in the biosecure facility.
Quadra will have a big influence on the day-to-day operations of the barn, and has some equity in it too.
But the farmers walk around the 65,000-square-foot complex like they own the place, talking in detail about how it will work.
Only two of the core group of nine farmer-shareholders have worked with hogs. But they all wanted to get into the business to provide jobs for young people in the area, create a new market for feed grain and supplement their incomes.
“We just expect a good return on our investment, which is really all that any business ends up at,” said Watson, adding he expects the core group to get returns of more than 20 percent.
After considering a number of production companies, the farmers went with Quadra.
Mill on site
Part of the appeal was having control over the feed through an on-site mill. Quadra was also willing to invest in the barn, so Watson said he knew it would have incentive to ensure efficient operations.
Gary Nestibo, another member of the core group, said he was impressed with Quadra’s good health record, adding he has heard horror stories about other large barns encountering disease problems.
The core group put up $320,000, and drummed up another $1.1 million from 94 limited partners in the area. Watson said the partners should make about a 15 percent return on investment over the long term.
They also raised $175,000 in debentures.
Having about $1.6 million in equity helped get financing for the rest of the $3.9 million project, Watson said.
The barn will employ five full-time staff and one part-time worker. But Quadra’s general manager Richard Wright said the infrastructure is in place to expand to 1,200 sows, doubling the workforce.
Wright said the Treherne barn is his company’s flagship project in Manitoba, where it wants to set up five more similar operations.
