JBS USA has announced that its Canadian subsidiary will go ahead with the acquisition of XL Foods, the Canadian processor at the centre of the country’s major E.coli crisis last year.
JBS Canada, which took over the management of the XL Lakeside beef processing plant in Alberta last October, will assume ownership of the plant, along with a beef packing plant in Calgary, a feedlot in Alberta and 6,600 acres of grazing land, subject to approval by US authories.
The deal will enable JBS USA to enter the Canadian beef market for the first time, with the capacity to process 5,000 cattle a day.
Bill Rupp, president and COO of JBS USA Beef, said: “After several months of careful consideration of the option and nearly three months of successfully managing the Lakeside facility, we have determined that the Canadian operations will serve as an important asset to our strategic global beef production model. We look forward to partnering with Canadian producers to deliver quality Canadian beef to customers around the world.”
XL Foods was identified as the source of an E.coli outbreak last summer that led to Canada’s largest ever beef recall. The plant, which was shut down while the outbreak was investigated, is now operating again under Candadian Food Inspection Agency (CFIA) supervision and has been re-listed by the United States Department of Agriculture’s Food Safety and Inspection Service (FSIS) for export to the US.
A statement from parent company JBS SA said: “JBS will in no case assume any of XL Foods’ debt or liabilities.”
The deal has been welcomed by the Canadian Cattlemen’s Association (CCA), which said it would give Canadian beef producers stability going forward.
“This is great news for producers. JBS has done a great job in managing the plant and helping it reach full potential. The new ownership will ensure feeders and producers continue to have access to another strong Canadian-located buyer for their cattle, while providing consumers with a steady supply of safe, high quality Canadian beef,” said CCA president Martin Unrau.