Thursday, May 14, 2009

Bagnall Worried... and he should be...

Mr. Bagnall is worried and he should be as he was one of the driving forces that got Government into this business and as everyone knows Government's success as a business operator is not stellar... just have a look at our Provincial golf courses which they claim to be worth $40,000,000.00 (a figure they probably spent building them) and without any debt service they are still losing millions of dollars a year... but they don't want to close them or look for a partner there... they seem to want to protect the golfers and not the taxpayers... it's unfortunate that the plant may close but the business scheme was destined to fail from the outset as every other private beef plant had already shut down because they were losing money hand over fist.... the Atlantic Beef Plant already had a partner in Co-op Atlantic and they bailed without any liabilities so I would be surprised if they could find an "Angel" investor.... Minister Webster suggested the Government was going to stick to their knitting and maybe he should remind his Cabinet members to do the same with the golf courses and sell them....
Cash crunch has P.E.I. looking for beef plant buyer
Thursday, May 14, 2009
CBC News
The only federally inspected beef plant in the Maritimes is still losing hundreds of thousands of dollars a month, prompting the P.E.I. government to look for a private buyer.
Atlantic Beef Products, jointly owned by the province and beef producers, opened in December 2004 in Albany, P.E.I., and has never turned a profit. It has racked up a loss of $30 million, and is burning through $200,000 to $300,000 a month.
Agriculture Minister George Webster told CBC News on Wednesday there's no end in sight to those losses.
"We still have enough revenue stream to sustain the plant for another three to five months, but when that money's burned through, then we are going to have a major challenge at that point in time," said Webster.
Webster said government is in contact with a dozen private investors, to see if anyone wants to buy the plant.
Opposition worries over closure
The only way the plant will make money is if it finds a niche market, said Webster.
A $12-million infusion of cash from the Maritime provinces and the Atlantic Canada Opportunities Agency a year and a half ago was supposed to help with that. Half of that money was from ACOA, but it was never delivered. The federal funding agency changed the money from a grant to a loan, and Webster said no one wanted that kind of liability, so the loan was never accepted.
The talk of cash shortages and deadlines has agriculture critic Jim Bagnall worried.
"Right now I'm nervous because if you go back in history, that's what they floated out when they wanted to close the pork plant," said Bagnall.
"They threw out numbers and said if they don't have things fixed within 90 days, at that time, that they were going to close it down."
The P.E.I. government closed down the pork plant in March 2008.
Despite the significant monthly losses at the beef plant, Bagnall doesn't think government should pull the plug. He said if the plant is closed, that will shut down the livestock industry on P.E.I. as well.

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