National Bank of Canada
has put Colbex into bankruptcy.
The Federation des
producteurs de bovins du Quebec (FPBQ), which controls the Levinoff-Colbex
plant at St-Cyrille-de-Wendover, Que., said market conditions are part of the
reason for the failure of the business.
RSM Richter is the
receiver.
Colbex management tried to
come up with a financial plan in April that would enable it to secure
government funding for upgrades, but talks with a potential partner fell
through.
The bank said Colbex will
report a loss of $7.5 million on the fiscal year that ended Dec. 31 and is
losing more than $1 million.
The FPBQ said Monday that
market conditions in North America's beef processing industry have further
deteriorated since the beginning of 2012.
According to
National Bank, Colbex's chiefs advised that the company would need another $3
million in interim financing to maintain normal operations until the end of
August
I'm not in the least surprised. Almost every packing plant run by farmers ends in failure. In this case, there was a good reason why cull cow slaughter virtually stopped in Eastern Canada before the BSE trade ban; as soon as trade resumed, so did the movement of culls to more efficient packers in the U.S. who, incidentally, didn't face extra Specific Risk Material costs required by the Canadian Food Inspection Agency.
OI course, Canadians can continue to eat beef from those Canadian cows slaughtered in the U.S.
