Alberta Beef Magazine - BeefNews.com

Canadian Premium Meats caters to niche marketers by Bonnie Warnyca
December, 2009

As if the discovery of BSE in the Canadian cattle herd wasn't enough to dampen the export ability for both Canadian beef and bison, the charred remains of the Edmonton slaughter plant a year later, left Canadian Rangeland Bison Inc. without an Alberta EU certified and federally inspected slaughter plant through which to market their customer's product. It also left bison producer Armin Mueller without a facility to slaughter and process his more than 2,000 head of bison.

Spurred on by the need to retain his market share, Mueller enlisted the help of two of his Swiss expatriates Yvo Schmucki and Werner Siegrist. Schmucki, a butcher by trade and owner of a provincially inspected meat facility, and Siegrist, an accountant and former dairy farmer seemed an ideal fit for Mueller's proposed packing and processing plant to eventually be located near Lacombe.

Siegrist was charged with creating a business plan for a 30,000 head, multi species custom packing plant and processing facility. "We incorporated the name Canadian Premium Meats (CPM) in 2005, and two years later, in August of 2007 we opened the doors," reflects Siegrist. "The timing for the plant seemed right. There were government grants to help with some of the developmental phases and with the American border closed, lending institutions were more open to the idea of increasing Canadian slaughter numbers. The plan focused around a custom processing facility to cater to the needs of the growing prairie niche marketers for bison, beef, elk and horses."

Building a slaughter plant at any time poses any number of challenges, but building a multi species facility complete with EU approval for all species may well have tested the patience of Job. "If we had known what to expect along the way, we may not have entered into this business," says Siegrist frankly. "But once you've begun, there is no place to go but straight ahead. We dealt with each road block one at a time including the new legislation of SRM segregation and removal."

"The Canadian government contends this will open new markets," he continues. "We believe it has just added extra costs and made us less competitive - something they've heard many times. But we firmly believe that if there really is a new proven market opportunity if we segregate and remove SRM material separately, then let them sign a contract and we'll do it. All of these regulations should be specific market driven and if the demands outweigh the costs - then we have the option to decline certain markets."

Siegrist knows what he's talking about. They are also constantly assessing customer requests and penciling out the impact to determine the profitability of fulfilling the many varied demands. Since opening the business they've also obtained organic accreditation and Halal certification. "Being a custom operation, you must try your best to accommodate the customer," says Siegrist. "Many people don't understand the complexity of some of the requests. Everything is costly and takes time. There are often third party audits and it may mean any number of onsite inspections. We must pay close attention to out of country labeling. Even when shipping product to domestic customers, each customer has their own standards and audit procedures that we must meet."

Some examples are that the EU only accepts AA Beef and A1 Bison and higher grades from OTM or UTM animals. Meat to the United Arab Emirates has to come from UTM animals and grade the same as for the EU. No grading is necessary to the US and OTM and UTM can be shipped.

All of these requirements force the CPM to segregate, sort and label the products accordingly. Boxes for export need to be hand stamped with health Certificate numbers and some countries require 'box seal labels' (EU) while others need 'translation labels' (Dubai).

Add to this mire of regulatory requirements, constant changes in cutting specs for the cut floor and there's an awful lot going on at this plant. While Schmucki is in charge of the day-to-day operations in the processing plant, Siegrist crunches the numbers and handles the Human Resources.

Much like many of their counterparts and other Agri businesses, CPM has had its share of difficulties attracting workers away from the oil and gas industry of Alberta. "Trying to start up a new business even a couple of years ago was difficult without enough employees," remembers Siegrist. "You can't even apply for temporary foreign workers until you've had a payroll for 12 months. We started up with just 17 people and today we employ over 60 workers."

Working in a packing facility and processing plant certainly isn't for the faint of heart or those without physical endurance. CPM now has some workers from the Ukraine and the Philippines and even though they must work under cold conditions, many are in their second year of employment. "We're working within the Alberta Nominee Program to nominate these workers for residency and citizenship," Siegrist tells us. "Another option is to try to get their visas extended. We don't know for sure how all of this will turn out yet."

CPM was constructed with a slaughter capacity of 35 head per hour which is more than the cutting floor can currently accommodate. Siegrist explains, "The business plan called for building the kill floor as large as possible leaving room for possible future expansion of the processing area. From a fabrication point we've reached our current capacity which means we can't process more than 500 head a week."

Processing several species of livestock and working with such a diverse group of value chain customers still presents new challenges daily for these three entrepreneurs. But while so many other smaller packing plants have faltered in recent years, it's encouraging to focus on one that for now is viable. When asked if there were other opportunities or new directions for the Lacombe plant, Siegrist replied, "We have identified other business opportunities, but you'll just have to wait and see."

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