Plans for district abattoir proceeding

Efforts to build a district abattoir are forging ahead as discussions, negotiations, and draft business plans continue between the board of the Rainy River District Regional Abattoir Inc. (RRDRA) and the interested operator, Northend Farms Ltd.
“We agreed the preferred option was to lease to an operator,” RRDRA president Steve Loshaw noted at a general membership meeting last Wednesday night in Barwick.
He explained the board of directors advertised for expressions of interest and had two responses. After conducting interviews, the board decided unanimously that Northend Farms Ltd. was its candidate of choice.
“Currently we are in discussions with Northend Farms Ltd. and are completing a preliminary review of a business model to determine commercial viability,” Loshaw remarked, stressing the role of the board is to build the facility and negotiate the best terms possible for the lease and for service to its members.
Loshaw indicated the next few months will be crucial as the board hopes to have the business planning complete by the end of February.
“Our vision has to be merged with the operator’s vision,” he noted. “And it seems our visions are pretty compatible.
“We need their game plan to firm up our business plan,” he added. “But we can’t sit too long because we have to get the application in for the provincial grant.”
Besides completion of the business plans, Loshaw said the next steps for the board also include continuing the membership drive, considering options on property, determining a memorandum of understanding with the operator, constituting a lease agreement, completing and approving the facility’s design, and tendering construction.
“Our goal is to open the plant in the summer of 2008,” said RRDRA secretary Bill Darby. “And we’d like to start construction this spring or summer.”
The board has begun to look at sites for the abattoir, considering criteria such as size, zoning, tax rate, road access, proximity to residents and businesses, topography, and environmental concerns—just to name a few.
Sites in Rainy River, Emo, and Fort Frances are being considered, as well as the properties of Fred Klug, Russell Richards, Steve Both, Marlin Carr, and Ken McDonald.
“We haven’t purchased anything yet and it doesn’t mean there aren’t other available properties,” Darby stressed.
The board also has determined the abattoir will be built to federal standards and operate provincially—at least at the start. And some processing will be required to make the venture viable.
“It’s difficult to compete with grain-fed products because we can’t get production costs low enough, but I think we can compete on cull cows, especially in a regional market,” Darby added, noting they would like to offer custom cut and kill and processing of ground products, sausage and smoked, custom orders, and value-added.
In addition, the RRDRA has two budgets, which were reviewed at last Wednesday’s membership meeting: a planning and administration budget and a proposed project budget.
The planning and administration budget incorporates membership fees and $30,000 approvals from both the Northern Ontario Heritage Fund Corp. (NOHFC) and FedNor, giving a total of $105,000.
To date, $46,500 has been deposited into the account, with $4,237 in expenditures from advertising, presentations, and legal fees. The account balance is currently $42,263.
Meanwhile, the proposed project budget includes membership loans, bank mortgage/lessee loan, an NOHFC grant, and a FedNor grant, totalling $1.8 million.
But so far, only $6,500 has been deposited into the account.
“We don’t have the money yet,” said Darby. “But we’ve been given the indication that it is no problem to get the funding. We just have to get the business plan and drawings in and we’ll be okay.”
Several questions were raised by members at Wednesday’s meeting, including
•Why poultry can’t be slaughtered in the abattoir?;
•Is there a plan ‘B’ if the business plans between the RRDRA and Northend Farms Ltd. are not compatible?; and
•Whether there can be a transfer of membership?
Darby explained the abattoir will be a red-meat only facility since poultry would require a separate one, but he promised to ask questions about whether it would be doable in the future.
As for a plan ‘B’ in the event plans don’t work out with Northend Farms Ltd., Darby said they would find another interested party or the board would hire management and employees to operate the facility.
“We haven’t discussed the transfer of membership,” Loshaw remarked. “But it is something we will look at.”
The board also reminded members of the Feb. 28 deadline to pay their $500 membership and complete the $2,000 loan.
There is no interest and no guarantee of payback on the loan, but Darby noted paid members will receive discounts on slaughter fees.
Members also voted last Wednesday in favour of the board finalizing the constitution based on the Nov. 9 draft and obtaining legal advice for that purpose.
Loshaw said the next membership meeting will be held at the end of February or beginning of March.
“I hope then we will have more progress completed and more to report,” he remarked, adding the board intends on distributing newsletters to members in the meantime to keep everyone informed.
“We’re trying to make the best decisions we can,” Loshaw added. “And if you have a question, feel free to ask or write a note.”