The South Cariboo Meat Co-op (SCMC) has informed its membership its abattoir project is in jeopardy of imminent collapse due to financial trouble.
SCMC secretary Christine Jordaan says the board put forward a recommendation to dissolve the co-op to the approximately 70 people who turned out at an Oct. 12 meeting.
She explains that an extensive professional cost estimation was commissioned in June, which the membership had been informed of, and then the board received the results in September.
This estimate, and numerous professional consultations that followed, indicate the development of the proposed abattoir would cost around $1 million – almost double more than the co-op has available through its current memberships and a grant.
As a result of this estimate, Jordaan says the directors were compelled to inform the membership of the perilous status of the project.
“The directors felt they had a responsibility to report their findings to the membership and recommend dissolution, thus protecting the considerable investment that the community has made.”
Jordaan adds a reason behind the recommendation is the community has “risen up and supported” the initiative, but current information available indicates it isn’t as feasible as the board initially believed.
“If the membership chooses to not accept that recommendation and still move forward, that’s fine, but we’ve been up front and transparent about what our expected costs are going to be.”
The other side of the coin in the co-op’s troubles is the financial projections, Jordaan adds.
The operational cash flows are not projected to be sufficient to service the shortfall as a debt, she explains.
Noting that creating a good business plan is essential, board chair Gus Horn says there isn’t any good data available on small abattoirs anywhere in the country to reference.
A strong marketing plan is also critical, but he adds this has also been hampered by a downward trend in the availability of livestock and declining regional and provincial slaughter figures.
“Livestock numbers are down in the province, for cattle, and prices are very high [for live animals], so its a very different thing than it was four or five years ago when the feasibility study that the project was initially built on was developed.
“[These have changed] not by 10 or 15 per cent; I’m talking by 30 or 50 per cent.”
No decision will be made on the recommendation until a members’ vote in November, Jordaan says, adding the membership agreed licensing and permit review processes will proceed because of the huge amount of effort they require.
The delay in voting on dissolution is intended to provide time for the members to absorb the news and allow a chance for a last-minute magic bullet.
“If other community members have solutions that are workable, then we are more than open to listen.”
She explains this might be a partnership or running it as a training facility, if such an opportunity exists.
There is currently a moratorium on new members as well as on any redemption of membership shares, Horn says, but should the co-op dissolve, members will get a portion of the funds remaining based strictly on their total investment (shares).
“If, indeed, dissolution occurs, money will be returned on a pro-rated basis fairly and equitably right across the board.”
