Winnipeg Free Press - PRINT EDITION

Beef plant has faced a difficult process

Many roadblocks in setting up facility

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Some might accuse Calvin Vaags of pursuing an impossible dream.

After all, the road to re-establishing federally inspected beef processing in Manitoba is littered with bitter defeats, the latest of which is the recently announced demise of the Manitoba Cattle Enhancement Council.

But Vaags appears to be a few months away from succeeding where others have failed in the decade since the BSE (bovine spongiform encephalopathy) crisis exposed how vulnerable Manitoba's cow-calf sector is to disruptions in export trade.

He had to raise his voice to be heard above the cement pumpers as construction continued this past week on a $13-million expansion of Plains Processors near Carman, a 1950s-era plant he purchased in 2008.

The Oakbank grain and cattle farmer first ventured into retail beef in 2004 when he opened the Carver's Knife outlet in Winnipeg. He later expanded to a second retail outlet and started supplying Manitoba beef wholesale. He's been working on achieving federally inspected status for Plains Processors for the past four years.

If all goes according to plan, the plant will be supplying the domestic and export markets with Manitoba-raised and processed beef early next year. The upgraded facility will employ 80 and handle 200 head of cattle per day to start. It could be scaled up to 400 head per day with minimum additional investment. It's designed so it can handle different species, as Vaags eyes the province's growing sheep sector.

Vaags is a dream big, start small kind of guy. And he is the first to admit things don't always go according to plan in the meat business. The past three years has been a roller-coaster ride filled with heady promises of financial support from federal and provincial governments -- very little of which has actually made it into the project's bank account.

A federal commitment of $2.8 million under the federal Slaughter Improvement Program evaporated because he couldn't spent it fast enough -- before the 2012 deadline. And a promise of $920,000 from the Manitoba Cattle Enhancement Council was still undelivered prior to the announcement in late August the council and its checkoff would be wound down.

Vaags said he welcomes the verbal assurances that both levels of government will support this project, but he has yet to see the money. He credits his shareholders, who have invested more than $3 million into the project, for keeping the dream alive.

"They are very much entrepreneurial-based people, they are pro-Manitoba and they are strong partners to have on this project," he said.

The MCEC was the provincial government's answer to the difficulties Manitoba cattle producers faced when fear over BSE caused borders to slam shut to live cattle exports in 2003. It was tasked with using the funds raised from a producer checkoff to develop meat export capacity.

Despite provincial government backing, a producer co-op collapsed before it could build the proposed cow slaughter facility near Dauphin. Another proposal, also backed by the MCEC, was to rebuild a mothballed hog-slaughter facility in Winnipeg. That project sat in limbo since 2011 when the federal government suddenly withdrew $10 million it had promised the project in 2009. And despite the untold millions already invested, all there was to show for the effort as of late August was an empty lot on Marion Street.

The lessons to be learned from those valiant, albeit arguably misplaced efforts, haven't been lost on Vaags.

There are several elements of his project he believes give it a good shot at success, starting with a strong business case based on its location in the middle of the country's third-largest cattle herd.

"The cattle are here and we've got the advantage over the big players in terms of the freight basis," he said.

"I'm not saying there isn't going to be challenges, but at the end of the construction process, we will have a federal plant."

Laura Rance is editor of the Manitoba Co-operator. She can be reached at 204-792-4382 or by email at laura@fbcpublishing.com

Republished from the Winnipeg Free Press print edition September 7, 2013 B7

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