Huron Expositor, 2005-12-28, Page 2Page 2 December 28, 2005 • The Huron Expositor
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A floor plan of phase one of the proposed beef processing plant in Brussels.
Beef plant businessplan shared
From Page 1
"It helps to substantially
reduce your risks to invest in
a processing plant," he said.
The way to become a suc-
cessful plant, Arlitt said, is to
provide a quality product to
non -U.S. markets as much as
possible.
"This plant will be defined
by its name, level of quality
and level of safety. We will
make sure it's as high as any
plant in North America," said
Arlitt.
By becoming certified for
European countries, he said
the plant will be able to
access the highest prices for
beef.
He said the best countries
to sell beef to include Mexico,
Japan, South Korea, Taiwan,
Hong Kong, Macau, China
and Southeast Asia, adding
that some still have a ban on
Canadian beef.
"It could be a bit of a prob-
lem selling to the European
Union because they want hor-
mone and antibiotic -free beef.
But, we could coordinate that
through the plant to open up
the European market because
it's very lucrative," said
Arlitt.
The business plan shows
phase one of the plant
designed to kill 500 head a
week, increasing to 1,000
head a week in phase two, up
to a possible 2,000 head a
week.
"Expansion can be based on
the markets out there," said
Mohammadi.
The construction schedule
in the business plan shows
expansions to the plant every
two years, with a start date
in 2007 and phase three in
operation by 2011.
While the first year of oper-
ation plans to see 50 per cent
of the sales in Canada, 40 per
cent in the U.S. and 10 per
cent to non -U.S. markets, by
2011, only 15 per cent is tar-
getted for domestic markets,
with 25 per cent in the U.S.,
25 per cent in non -U.S. and
35 per cent in selective non -
U.S. markets.
Profits are projected to
start at $2.3 million in 2008
and rise to $15 million by
2014.
"We don't see any dividends
to investors in the first year
so that we can reinvest in the
plant. We need to grow the
business," said Arlitt.
The business plan aims to
find 250 farmers to invest
$40,000 each to raise the nec-
essary capital to build the
plant.
But, there was some doubt
in the audience about
whether finding enough
investors will be possible.
"There's a lot of poor farm-
ers out there right now. I
don't know how they're going
to come up with $40,000
each," said Glen Howling, of
Grey ward in Huron East.
Another farmer asked how
a farmer -owned co-op process-
ing plant in Brussels could
take on multinational corpo-
rations like Cargill.
"Cargill controls a large
segment of the market and
they're not going to let anoth-
er player take their market,"
he said.
Arlitt responded that he
thinks the plan is feasible but
added, "A commitment by the
producers is a must."