Plans moving forward with abattoir project

A vote put forward by the Rainy River District Regional Abattoir Inc. board at a general membership meeting in Barwick last Thursday night saw 32 members favour moving ahead with the plans proposed while just three were opposed.
After prospective operator Sunrise Meats and Sausage indicated back on Sept. 25 that it was unable to proceed with the project, the board of directors came up with three options on how to proceed.
These included re-advertising for a lessee/operator, seeking investors to contribute $100,000 and negotiate a “for-profit” deal with the RRDRAI as a non-profit partner, and constructing and operating the facility on a non-profit basis and hiring a manager and staff.
Upon reviewing the pros and cons of these options, RRDRAI secretary Bill Darby declared the board’s suggestion was to move forward with the third option—constructing and operating the facility on a non-profit basis and hiring a manager and staff.
“That way we’d get on with it and build the facility,” he stressed, noting the first two options could require another six-month negotiation period.
Also with the first two options, it wasn’t likely they would qualify for government grants, Darby added.
As well, the business planning they’ve done to date provides a good base for this third option—and puts them in a better position to receive community contributions.
But Darby did say with this option, they may have to satisfy environmental assessment requirements, and that the board would have to hire a competent manager and staff.
And with no processing plant planned, producers would need to market their own animals.
“The board would also have ongoing responsibility of oversight,” Darby noted, saying this point was viewed as both a pro and con by the board (i.e., it would be beneficial to have that responsibility, but would require continued work and effort).
The pros for the first two options, on the other hand, alleviated involvement in day-to-day operations and would provide a negotiated discount for members.
In addition, the board seemed skeptical about trying these options again as both had been tried in the past without success. It also felt these approaches may prove difficult to attract a viable business offer.
Darby indicated the push to move forward on the project as quickly as possible was heightened—thus the recommendation for option #3—by new information brought to the RRDRAI board.
“The board has been informed by Mr. Bob Wall that Wall’s Abattoir in Dryden will stop taking animals from the Rainy River District in fall, 2008,” said Darby.
“The reasons given is the Walls are receiving more animals from our district than they can handle, they can’t handle all of Dryden’s needs, and they don’t want to expand their operation,” he explained.
Darby also noted the 99 members (12 still unpaid) have offered 800 animals commitments to the project, with the loan criteria of $100 per animal commitment to a maximum of $2,000.
There is the option for members to lend more than $2,000 at a three percent interest rate.
The RRDRAI is expecting the total cost of the project to be about $1.5 million, and their financial report shows they have a bank balance of $57,047 as of Oct. 18.
In the Planning Account, $43,500 has been deposited from membership fees and $55,235 has been deposited from grants and transfers. More than $60,000 has been spent on ads, legal advice, and work with Mallot Creek Strategies Inc.
In the Project Account, $18,600 has been deposited from loans and animal commitments, with more than $300 of interest earned. And since nothing has been spent from this account, there is a balance of nearly $19,000.
To fund the abattoir project, Darby explained the plan is that one-third of the money will come from the Northern Ontario Heritage Fund Corp., one-third from FedNor, and one-third from the members and community.
The board provided information on their next steps and timelines, indicating it still anticipates completion of construction by next summer.
Next month, the board plans to negotiate with municipalities and acquire property, apply for a provincial abattoir licence, apply to the Ministry of the Environment for lagoon construction, finalize the design and business plan with Mall Creek Strategies Inc., and apply for government grants.
Then in December, it hopes environmental investigations and preliminary site preparation will begin, and by January it would like to finalize supply commitments with the membership and collect payments.
Fundraising will take place between January and March, then in the spring the board will tender for construction of the facility.
There was a chance for members’ questions to be addressed prior to the vote.
Due to the majority vote in favour of the RRDRAI constructing and operating the abattoir on a non-profit basis by hiring a full-time manager and staff as required, the intention of the board is to work towards that goal.
“Thanks for your vote of confidence,” RRDRAI president Steve Loshaw said. “We will continue to work hard to make sure this happens.”