A veteran of the North American beef industry says he has no doubts he can turn a long-shuttered Alberta beef packing plant into a profitable business.
Rich Vesta, the former CEO of the North American beef division of Brazilian meat packing giant JBS, has set up a temporary headquarters for a new family-owned company, Harmony Beef, in the receiving office on the back parking lot of the short-lived Rancher’s Beef packing plant just on the north edge of Calgary.
About $18 million in renovations and upgrades have already started inside the nine-year-old plant that was mothballed six years ago. Vesta’s company, Vesta Holdings, expects to finalize the purchase of the plant from Alberta-based Sunterra Beef by Nov. 1.
“I wasn’t ready to retire and when I found this gem of a facility here in Alberta I knew it could make money too,” Vesta said. “I don’t want to sound flippant, but often raising the money for a project like this is the easy part. The challenge is to know how to manage and operate the facility and market your product.”
Joining Vesta in the management of the family-owned company is his son Jeremy, a risk management specialist and former grain trader with Bunge.
Vesta said he expects Harmony Beef to be up and running by June 1, 2014, with about 125 workers processing up to 775 head of cattle per day.
The new business’ main focus, he said, will be on a global marketplace with branded beef products, all produced in the largest EU-approved packing plant in Canada.
“I am not here to compete with the existing meat packing plants, because we won’t be producing commodity beef,” said Vesta, who now has a home in nearby Airdrie. “It took me a while to realize it myself, but Alberta and western Canadian ranchers produce some of the highest quality beef in the world.”
The original $40 million Rancher’s Beef plant, backed by 50 investors, was launched in 2005 as a producer-owned facility aimed at shoring up the Alberta beef industry in the wake of the 2003 BSE crisis.
Burdened by debt, a relatively high Canadian dollar, limited markets, high labour costs, regulatory issues and a number of other local challenges, the business began bleeding money almost immediately and closed 14 months later.
The plant and 140-acre site, valued at $75 million, was sold to Sunterra in a court-ordered in late 2007 for an undisclosed amount.
— Lee Hart, editor of the Cattleman’s Corner of Grainews, writes from Calgary. CLICK HERE to read the Lee’s Insight blog entry for Oct. 17, 2013, from which this article is excerpted.