Ongoing cash losses with no end in sight at Atlantic Beef Products have led the Prince Edward Island government to seek private-sector buyers, CBC reported Thursday.
The broadcaster said the packing plant, which has lost money since it opened in late 2004, is now losing cash at the rate of $200,000 to $300,000 a month, for a total loss of about $30 million.
“We still have enough revenue stream to sustain the plant for another three to five months, but when that money’s burned through, then we are going to have a major challenge at that point in time,” provincial Agriculture Minister George Webster told CBC.
The province, he said, has been in contact with about a dozen private investors to see if any would like to buy the Maritime provinces’ only federally-inspected beef slaughter plant.
The P.E.I., Nova Scotia and New Brunswick governments had each agreed to kick in $2 million in late 2007 for a bailout for the facility, which is co-owned by beef producers and the P.E.I. government.
Their contributions were part of an agreement that included a $6 million investment from the federal Atlantic Canada Opportunities Agency (ACOA), but that contribution was rejected when ACOA in early 2009 changed its pledge from an investment to a loan.
No one wanted the liability of such a loan, so it was never accepted, Webster told CBC.
The Atlantic Beef plant was founded by the Borden Carleton Atlantic Beef Products Society, a regional beef producers’ co-op. Webster told CBC the plant will need to find a niche market if it hopes to make money.