January 21, 2008

Canadian hog plant on verge of bankruptcy

The future of the plant  - which is which is jointly owned by a Quebec firm and Island hog farmers - is uncertain.
 

Owners of Prince Edward Island's (P.E.I.) only hog processing plant announced on Friday (January 18, 2008) that they are unable to repay their CAN $2.1 million (US$2.04 million) loan to the province.

Scott Dingwell of Natural and Organic Food Group (NOFG) P.E.I. told the media that the plant had ran out of time and money, thus the owners have surrendered the plant to the P.E.I. Lending Agency.

NOFG was given 10 days to repay the CAN$2.1 million (US$2.04 million) it owes provincial taxpayers on Friday January 11, 2008.

The imminent deadline is on Monday and the owners failed to secure private investors due to lack of time and money.

NOFG produces high-end pork intended for a niche market but the plant was struggling to make its transition into these higher-end pork products.

Dingwell believed that success in the market could have been achieved if they had more time and investment. Last month, the provincial government rejected a request for a financial injection of CAN $2 million (US$1.94 million) for the plant.

The province planned to put the plant into receivership, and the plant's future will be decided by the P.E.I. Lending Agency.

The provincial government has been clear in the past it will not invest any more money into the plant but local NOFG owners said they hope this business will be continued, either by the province or by new owners.

They also hope the government will keep its promise to operate the plant for three to six months as it transits to new ownership.