Monday, June 4, 2012

Colbex is bankrupt


National Bank of Canada has put Colbex into bankruptcy.
The Federation des producteurs de bovins du Quebec (FPBQ), which controls the Levinoff-Colbex plant at St-Cyrille-de-Wendover, Que., said market conditions are part of the reason for the failure of the business.
RSM Richter is the receiver.
Colbex management tried to come up with a financial plan in April that would enable it to secure government funding for upgrades, but talks with a potential partner fell through.
The bank said Colbex will report a loss of $7.5 million on the fiscal year that ended Dec. 31 and is losing more than $1 million.
The FPBQ said Monday that market conditions in North America's beef processing industry have further deteriorated since the beginning of 2012.
According to National Bank, Colbex's chiefs advised that the company would need another $3 million in interim financing to maintain normal operations until the end of August


I'm not in the least surprised. Almost every packing plant run by farmers ends in failure. In this case, there was a good reason why cull cow slaughter virtually stopped in Eastern Canada before the BSE trade ban; as soon as trade resumed, so did the movement of culls to more efficient packers in the U.S. who, incidentally, didn't face extra Specific Risk Material costs required by the Canadian Food Inspection Agency. 


OI course, Canadians can continue to eat beef from those Canadian cows slaughtered in the U.S.