SASKATOON – Saskatchewan hog producers could be selling even more hogs to the Intercontinental Packers slaughter plant in Saskatoon if it is bought by Burns Foods Ltd.
But some fear the buyout could be the beginning of the end for the family-run operation, leaving Saskatchewan hog producers far from slaughter plants.
Last week Chip Mitchell, who now runs Intercon, revealed a deal with Burns that would have the Calgary company buy and take control of the Saskatoon and Vancouver plants. Intercon’s beef slaughter plant in Moose Jaw is not included in the deal.
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Fred Mitchell, who ran Intercon for 19 years, obtained a court injunction preventing his siblings and mother from selling the plant. The family is appealing the injunction. If it is quashed, the sale will happen very fast, Burns president Larry Harding said.
Jim Morris, manager of SPI, Saskatchewan’s hog marketing board, is cautiously optimistic about both Burns and the Saskatoon plant’s future.
“If there’s going to be any rationalization of slaughter in Western Canada as a result of this purchase, you would have to expect the Gainers Edmonton location is the most vulnerable,” he said the day after the deal was made public.
“We know (Burns) quite well and they’ve been good people to deal with and I think they’re a good company,” said Morris.
Florian Possberg, a Humboldt hog producer who oversees many large scale, intensive barns in the province, thinks a buy could be good.
“I sort of envision Burns putting a lot of their resources in a Saskatoon plant simply because of its location,” he said.
With a major Schneider’s plant being built in Winnipeg and the Red Deer Fletcher’s plant having undergone a major expansion, Saskatoon may provide the best opportunity for a company like Burns to gain access to a lot of hogs.
Possberg said Burns might be able to raise Intercon to the level of plants in Alberta and Manitoba.
“We’re a little bit behind but a company with the resources of Burns, they have the resources to do what’s necessary.”
At Burns, Harding said the Saskatoon plant fits into the company’s long-term expansion plans and should fare well in the industry consolidation he expects over the next two years.
“Contrary to what I’ve read in the paper, we’re not buying this to close it,” Harding said. “We’re buying it to run it and expand it.”
Last year Intercon’s Saskatoon plant received a $3 million conditional grant from the provincial government to expand its processing and work force. The company has also received about $10 million in loans from the province over the past two decades.
Agreements with government stand
Harding, Mitchell and Saskatchewan crown investments minister Berny Wiens say the terms of those agreements are unaffected by who owns the plant and the company.
Harding said Burns is going to press ahead with expansion, although its nature might change to fit with the company’s larger plans.
He said it is important for Burns to increase processing capacity before an industry shakedown.
“We need to make sure we have the mass,” he said. “Unless you’re in a position to be a part of that change, then you’re going to have a problem.”
Harding said Burns hopes Saskatchewan’s hog production can increase to meet the expansion.
While Manitoba has had a higher profile in recent hog industry news, Harding said Burns is happy with Saskatchewan.
“We have a good relationship with SPI, we have confidence in Saskatchewan.”
