A Quebec company that is an emerging powerhouse in the meat sector has struck a deal to purchase the Alberta lamb processing plant and large feedlot of the defunct North American Lamb Company.
“They seem to run a fair-sized conglomerate of businesses related to agriculture and the livestock industry,” said Neil Narfason, an official with Ernst & Young who is a court-appointed monitor overseeing the sale. “They’re a known name in the industry for sure.”
However, most consumers, even in the markets it serves, probably don’t know the Préval Ag name.
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The company has sales of more than $720 million annually, but much of that is under the brand names of companies it has either created or acquired. It’s run by three brothers who began by starting a veal farm and have since grown the company into the largest integrated veal and lamb supplier in North America with three dozen divisions including beef, poultry, vegetables, field crops, grain processing, and transport.
A spokesperson said the company would have no comment until the purchase — Préval Ag’s first in Western Canada — officially closes.
The sale to two newly created divisions of Préval Ag, WestFine Meats and West Excelamb, is slated to be completed on Jan. 27, Narfason said.
The deal is good news for lamb producers, as the Innisfail processing plant formerly known as SunGold Speciality Meats is the only federally inspected plant in Western Canada.
Narfason said he got calls from producers who were anxious about the future of the facility, which continued to operate after its former owners — a New Zealand company and Alberta investors — sought creditor protection.
“Everyone wanted the Innisfail plant to continue,” said Narfason. “It’s welcome news that the plant continues, and continues to be an option for producers, especially western Canadian producers.”
The new, almost-owners want to encourage lamb production on the Prairies, he added.
“The buyer of the plant recognizes the key producers in Western Canada and how important it is that they have enough volume,” said Narfason.
It isn’t clear whether the new owners will want to revive the bid of the former owners to create a business able to supply fresh lamb year-round.
The North American Lamb Company was created by merging the Manitoba lambing barns owned by a major New Zealand lamb company with the Innisfail and Iron Springs facilities owned by Alberta investors.
By lambing indoors and finishing animals at Iron Springs, the goal was to provide a steady year-round supply of lamb for the Innisfail plant.
However, the enterprise never made money and by the time it sought creditor protection last summer, it owed nearly $53 million to creditors, more than 90 per cent of that to lenders FCC, Bank of Nova Scotia and a Canadian division of the New Zealand company.
The sale price of the Alberta assets have been sealed by the court at the request of the Ernst & Young monitors.
The sudden collapse sent the local lamb industry into a state of uncertainty and worry. But things have unfolded better than many anticipated.
“I don’t think the restructuring or insolvency of the North American Lamb Company had a lot of impact on the market,” said Narfason. “At the start, there was a lot of concern that we would flood the market with a bunch of animals. That never really happened. We were very cognizant of not crushing the market.”
While some sales took place in Alberta and Manitoba, a large number of animals were sold to eastern Canadian buyers, he said.
As well, all producer contracts with the Innisfail plant were honoured throughout the fall and winter, creating little disruption, said Narfason.
Préval AG, headquartered in Saint-Hyacinthe (just east of Montreal), has more than 1,400 employees, many working for companies it has acquired. Its products include veal, lamb and beef sold under brands such as Famille Fontaine and Catelli Brothers as well as market vegetables and grain. The company was founded by Fabien Fontaine, who was joined by his brothers Donald and Alexandre.
