Levinoff-Colbex beef plant to be sold for parts: report

(Canada Beef Inc. photo)

A Quebec cattle producer group’s bid to buy and reopen the shuttered Levinoff-Colbex beef packing plant in the Centre-du-Quebec region has been rejected, according to the province’s main farm organization.

The ill-fated cull cow slaughter plant’s receiver, Richter Advisory Group of Montreal, had been taking bids on the St-Cyrille-de-Wendover plant’s assets this summer, for sale “as is, where is,” either as a whole or on a “piecemeal” basis.

A call for tenders was issued from Richter in May with a June 17 deadline. Among the bidders was the Cooperative d’abattage du Quebec, a 535-member cattle producers’ co-op, according to La Terre de chez nous, the newspaper of Quebec’s Union des producteurs agricoles (UPA).

The co-op, La Terre said in a report Friday, already had a deal in place with livestock truckers and had been prepared to guarantee a slaughter rate of 625 cattle per week.

However, the newspaper reported on its website Friday, the co-op’s offer has been rejected in favour of an unnamed “liquidator’s” bid.

The successful buyer’s name and the bid’s exact amount were not available, the report said.

In an email Friday to AGCanada.com, Benoit Gingues, Richter’s representative on the Colbex file, said he could not provide any information on the plant’s future until the agreed-upon transaction is approved in Quebec Superior Court.

The plant, which included slaughter equipment plus processing equipment from the former Levinoff further-processing plant in Montreal, is to be emptied since the building and land are not part of the sale, La Terre said Friday.

Paul Doyon, who spearheads the producer co-op, was quoted on the La Terre site as saying the group was “shocked” it could not convince Investissement Quebec — the province’s investment financing agency and the plant’s principal creditor — to support the co-op’s plan for the plant.


Provincial opposition ag critic Andre Villeneuve said in a separate release Friday he “deplored” that the co-op’s offer had been refused and would lead to the plant’s dismantling.

Access to a slaughter plant for cull cattle is essential for Quebec producers, who otherwise have to truck their cull animals to Ontario or the U.S., he said, urging provincial Agriculture Minister Pierre Paradis to come up with solutions for producers.

It was distressing, Villeneuve added, that Investissement Quebec wouldn’t meet with the producer co-operative so it could present its proposal.

The Levinoff-Colbex plant — which at one point was the main cull cow packer for producers in Quebec, Atlantic Canada and Ontario — was the focus of a blockade by cattle producers in 2004 in the wake of the BSE crisis, when the bottom dropped out of the market for culls from dairy and beef operations.

Quebec’s cattle producer group, the Federation des producteurs de bovins du Quebec (FPBQ), bought an 80 per cent stake in the plant in 2007 and began paying 42 per cents per pound for cattle delivered there.

The FPBQ then voted in 2008 to contribute $53.86 per cull cow for a new capital injection of $30 million into the facility. But the plant went into receivership in May 2012, shortly after shutting its doors indefinitely, leaving producers on the hook for the $53.86 levy through 2014.

An independent report by KPMG on the Levinoff-Colbex plant, released in February by Quebec’s previous Parti Quebecois government, found the plant was sold for fair market value ($62.5 million) in the context of the BSE crisis and cull market conditions at the time.

However, the report also noted “extras” on top of the original sale price weighed on the plant’s potential profitability. Those included remunerations outside of the original sale agreement; unconventional levels of bonuses; fees paid for an outside company’s promotional work; and fees paid to a company providing weekly cattle price data.

Furthermore, then-ag minister Francois Gendron noted from the report in February, a parallel supply network had been set up for cull cows in which the Levinoff-Colbex plant was forced to pay higher prices against competing Ontario packers.

Gendron in February ripped the previous Liberal government for its “blindness” to the plant’s finances while producers found themselves in a vulnerable situation. — AGCanada.com Network



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