“I am pleased to report that we have successfully negotiated two letters of intent that substantially reduce the amount of equity capital that we need to implement a value-added project,” says Robert Coon, president of Iowa Premium Pork.

One involves an owner of a meat processing plant located in LeMars, Iowa, that was built in 2000. This option would allow Majestic to lease the plant for two years, and then purchase the plant at the conclusion for a pre-determined price. Majestic plans on making the down payment on this plant with positive cash flow accumulated during the first 21 months of operations, says Coon.

The second letter is for a harvest and pre-processing arrangement with Sioux-Preme Packing Company. Under this arrangement, Sioux-Preme would cut each half carcass into three pieces, which would then be shipped to Majestic. The change from receiving carcass halves to receiving pieces substantially lowers equipment costs, notes Coon.

“I am also pleased to report that 103 of the producers who subscribed for shares in the Hartley project have left their money on deposit with the escrow agent,” says Coon. “These subscribers would have represented total investments in the Hartley Project of more than $2.1 million, which is 91 percent of the total investment that would have been made by all of the producers who subscribed.”

It now appears that Majestic will be able to implement the LeMars project using conventional bank financing with a total of approximately $2.5 million of equity and non-conventional debt financing. This is $400,000 more than the total investments represented by the Hartley subscribers who have left their money on deposit.

IPP will hold four informational meetings to describe their projects to Iowa pork producers. All meetings will begin at 1:00 p.m.  “The board urges you to attend one of these meetings to hear about this exciting project,” says Coon, “have your questions answered, and discuss the project with fellow pork producers.”

Day

Location

Directions

Thursday,

June 3

Knights of Columbus

606 West Third Ave.

Washington, IA

From Highway 92, go north on Marion St., then 4 blocks west on Third St. to the hall (it is behind St. James School).

Friday,

June 4

Red Fox Inn

1900 Heritage Way

Waverly, IA

Highway 3 on west side of town

Monday,

June 7

Holiday Inn Gateway Center

2100 Greenhills Drive

Ames, IA

From Highway 30, take exit 146 to Elwood Drive, go south on Elwood Drive and then west at the hotel’s sign.

Tuesday,

June 8

Western Iowa Tech

Room 300B

200 Victory Drive

Cherokee, IA

From Highway 59, turn at the McDonalds and go west one block on Victory Drive, the building is on the north side of the street.