A pork-producer cooperative, Iowa Premium Pork, has had its eye on a pork-processing plant in Hartley, Iowa. But, the group still needs to raise some cash– between $5 million and $6.5 million by April 1 to buy the plant, which PM Beef Holdings LLC currently owns. The Hartley plant has been closed for about year.
Under the pending negotiations, Iowa Premium Pork would pay $2.5 million for the building, but will need additional funds to purchase equipment and upgrade the facility.
This is Iowa Premium Pork's second attempt at a plant. Last year it attempted to buy Iowa Packing Co, a processing plant in Missouri, from Pinnacle Food Group, but the deal fell through when the co-op couldn't raise the $31 million needed.
Majestic Food Group LLC, a subsidiary of Iowa Premium Pork Co., would acquire the Hartley processing facility, according to a report in the Des Moines Register. Under the plan, Iowa Premium Pork would slaughter hogs at other plants, and ship the carcasses to Hartley for processing. The goal is to open the plant by Aug. 1, processing 1,000 hogs a day. The plan is to quickly expand capacity to 2,000 hogs a day. Officials project that in three years, 1.5 million hogs could be processed annually.
There are 1.7 million shares of the co-op for sale, at $10 each. One share grants a pork producer the right and obligation to deliver one hog per year to Majestic Foods, notes Jim Long, the co-op's attorney. Stockholders must be members of the owa Premium Pork Co.; membership costs $300 and a minimum of 500 shares.
Producers investing in the Hartley project could average of 99 cents more for each 100 pounds of pork sold to the co-op, according to company projections.
Iowa, Illinois, Kansas, Minnesota, Missouri, South Dakota and Wisconsin producers are eligible to buy stock, according to Long. Securities laws prevent Nebraska producers from participating, he said.
Des Moines Register