Niverville based Purotone Cooperation has thirty days to either restructure or start selling off assets after filing for bankruptcy protection September 12.
By Marianne Curtis
On September 12, the province’s third largest hog producer Puratone Corperation filed for bankruptcy protection.
According to court records, the Niverville based company has thirty days to restructure or sell it’s assets leaving at least 350 jobs in limbo.
In a statement Puratone President and CEO Ray Hildebrand says the company has been streamlining operations for the past two years to minimize cash flow burdens.
“In spite of being highly competitive in both the domestic and global landscape, the market challenges have now been exacerbated by the US drought to the point where there are no further operational restructuring pursuits or austerity measures available to us that could protect us from the liquidity crisis the industry is facing,” stated Hilderbrandt’s statement. “Our primary focus must continue to be employee safety, the care of our animals, and the safeguarding of the environment.”
Puratone began in 1973 as a small feed retailer and became a major feed supplier within Manitoba. Since then the company has grown into a major player in the pork industry with a system of 28,000 breeding sows and marketing over 500,000 hogs per year.
There are over 40 farms dedicated to hog production, three feed mills that produce about 250,000 tonnes of feed annual and other agriculture related business interests.
Karl Kynoch, chairman of the Manitoba Pork Council says this is a significant blow.
“This is huge. This just emphasizes what the industry is going through,” he told media. “The fact that Puratone has done this — they’re reliant on solely hogs.”
Puratone’s move came days after Big Sky Farms, Saskatchewan’s largest pork producer, went into receivership. Its financial problems are linked to drought in the U.S., which has led to high feed prices in Canada.
Record losses in Manitoba’s hog industry has forced hundreds of producers to leave the business. Fifteen years ago there were almost 5,000 hog producers in the province but according to the pork council, that number has dwindled to fewer than 500.
“I’ve been expecting stuff like this to happen,” Kynoch said. “I’d say for the last two months, there’s been a number of independent small farms that have been shutting down quietly.”
Dave Bauer spokesman for Maple Leaf says he is not surprised by the troubles Puratone is facing.
“It is no secret that the hog industry is facing challenging times, so the next six months will be difficult,” Bauer says. “The good news is that Canada remains one of the lowest-cost locations in the world for pork production, and Maple Leaf is confident the industry will recover.”
He added that it was too early to say if Maple Leaf would try to buy Puratone.
Bauer said it’s too early to say if Maple Leaf would try to purchase Puratone, which supplies less than 10 per cent of the meat that is processed at the Brandon plant.
Maple Leaf has contingency plans in place to produce more hogs in Manitoba if Puratone goes out of business, he said.