Thorn Apple Valley acquires retail division from Doskocil
Southfield, Mich.-based Thorn Apple Valley Inc. has gained access to the Wilson and Corn King brand names after acquiring the retail division of Doskocil Cos., which recently changed its name to Foodbrands America Inc.
The $70 million deal, including the assumption of $7 million in debt, gives Thorn Apple Valley production facilities in Shreveport, La., Forrest City, Ark., and Concordia, Mo. The move also strengthens the company's current product offering and geographic coverage, noted Joel Dorfman, Thorn Apple Valley president and chief operating officer.
Oklahoma City-based Foodbrands will use about $57 million from the purchase to pay off long-term, post-bankruptcy debts, the company claims. It may receive as much as an additional $10 million for the sale, depending on Thorn Apple Valley's stock price in the next five years. Doskocil emerged from bankruptcy in 1992.
"[The sale] represents a win-win opportunity for both companies," said R. Randolph Devening, Foodbrands chairman and president. "Redeploying the capital dedicated to the retail division allows us to increase the focus on our other higher-margin food businesses. We also plan to continue implementing our strategy to acquire food manufacturers that are successfully exploiting product niches in the [foodservice] sector."
Foodbrands' retail division posted an operating profit of $6 million on sales in 1994. The company's overall sales were about $220 million.
Thorn Apple Valley will tap into its manufacturing and sales capabilities in operating the retail division, Dorfman said.
South Korea agrees to changes in regulations of meat imports
South Korea has agreed to make key changes in its regulations governing U.S. meat imports, which could end a trade flap between the two nations that began last year over hot dogs, according to Reuters.
An agreement was reached in April. A potential confrontation between high-level officials at the new World Trade Organizations may never take place if South Korea follows through with the agreement.
The U.S. meat industry charged that South Korea unfairly restricted its markets to U.S. meat producers by imposing unrealistically short shelf-life rules for meat products and other measures. But South Korea has agreed to extend its allowable shelf-life time for imported fresh pork to 50 days from 10, and to 100 days from 14 days for beef beginning in September.
The trade flap has left its mark on the industry. Montana ranchers and other state residents who make their living in the meat industry have suffered greatly, according to Sen. Max Baucus (D-Mont.)
"It cost us hundreds of millions of dollars in lost business," Baucus says.
Last summer, the Meat Industry Trade Policy Council, a consortium of industry organizations, complained to the U.S. Trade Representative's office that South Korean barriers on red meat exports "were among the most severe of any industrialized nation of trading bloc."
Hormel moves on several fronts
Austin, Minn.-based Hormel Foods Corp. announced the following plant and personnel moves:
-- The company awarded bids for major renovation and expansion of its pork processing facilities in Austin, leased to Quality Pork Processors Inc.
A.J. Lysne Contracting Corp. of Owatonna, Minn., will be the general contractor for the $19 million project, which is scheduled to begin this month.
The project involves construction of additions totaling 50,000 square feet, including a new cooler and expanded rendering operation, as well as renovation of pork processing facilities and improvements in waste treatment procedures.
When completed, slaughtering capacity will increase from 13,000 to 16,000 head a day, creating a source for area producers to market an additional 750,000 hogs annually.
Sixty-five new jobs will be added to the current 800-employee level for Quality Pork Processors, and 10 new jobs will be added for Hormel.
-- Floyd J. Albers was promoted to manager of the company's flagship plant in Austin. Albers, who had been manager of Hormel subsidiary Rochelle Foods in Rochelle, Ill., replaces Ralph Nelson, who retired after 35 years with the company.
Albers will oversee the manufacture of several consumer-branded meat and grocery items at Hormel's Austin plant, the largest of 12 company manufacturing facilities.
-- Calvin M. Jacobs succeeds Albers as manager of the Rochelle plant. Jacobs was manager of Hormel's frozen food plant in Oklahoma City. He will be replaced by Terry W. Hadden, who had been product manufacturing manager at the company's corporate offices.
-- Ronald W. Fielding was elected vice president of the company's international subsidiary, Hormel Foods International Corp. Fielding will add to the company-wide efforts to expand its presence in developing markets around the world.
NPPC selects new leader
A veteran agriculture industry executive with a background in management, marketing and communications, as well as with pork producers, is the new CEO of the National Pork Producers Council.
Larry Graham, who created Pork Profit Edge, a weekly newsletter in 1991 and is a former executive vice president of the Illinois Pork Producers Association, took over May 15. He replaces Russ Sanders, who resigned in March.
Previous to joining NPPC, Graham was executive vice president of Brock Associates, a Milwaukee-based agricultural consultant firm.
USDA approves spray chills even if quality check falls short
Plant personnel can use spray chills to cool beef carcasses, even if a check of for an Acceptable Quality Level fails because of visible contamination, according to a new USDA policy.
"Because temperature is a primary factor affecting bacterial multiplication, any lots failing beef carcass [quality levels] should continue through the chilling cycle," according to the revised guideline. "However, rejected lots must be identified, reworked and pass reinspection prior to fabrication or shipping. Any of the three sample units examined on a [quality check] with fecal, ingesta or milk contamination, should be trimmed immediately."
USDA's previous guidelines stated that plants failing quality checks because of visible contamination could not use spray chills.
The policy is not without controversy. A memo obtained by Food Chemical News showed inspectors' opposition. This "is the first step of eliminating zero tolerance," according to the memo distributed by union chief David Carney.
Kosher products on menu for reopened beef packing plant
Chicago-based A.E.R. Acquisition Corp. has bought and will reopen a Gordon, Neb., beef packing plant. It will specialize in kosher beef production. Terms of the agreement were not announced.
A.E.R. will begin slaughtering 300 fed cattle per day at the Nebkota Beef Packing plant next month, producing kosher and non-kosher beef. It will employ around 60 people, including several rabbis who will slaughter the animals and examine the beef.
Normally, only the forequarters of each slaughtered animal qualifies as kosher. The hindquarters are marketed as non-kosher.
The plant is expected to purchase most of its slaughter cattle requirements from local feeder sources in southwestern South Dakota, eastern Wyoming and the Nebraska panhandle.
The decision to create a kosher operation puts it into a specialized niche market, according to Gary Ruse, president of First National Bank, which sold the plant to A.E.R. It will be the only kosher facility in Nebraska.
The plant will help the state meet a growing demand for kosher beef in Israel and the United States, noted Pat Ptacek, assistant director of Nebraska's Agriculture Department.
Nebraska signed a memorandum of trade with Israel several years ago when Tel Aviv first decided to privatize its meat importation system and allowed purchases of non-kosher beef.
ConAgra buys chili, wiener brands from Quaker Oats
Omaha, Neb.-based ConAgra Inc. has acquired Wolf Brand, a major regional chili processor, and Van Camp's from Quaker Oats Inc. Terms were not disclosed.
Wolf Brand chili is a leading brand in the Southwest while Van Camp's is a leading brand in canned beans and wieners. Annual sales of the combined businesses is a about $180 million.
"These businesses fit us like a glove," noted Philip B. Fletcher, ConAgra chairman and CEO. "They dovetail exceptionally well with our grocery products sales and distribution systems and packaging technology. Most of the ingredients for Van Camp's and Wolf Brand are available inside ConAgra.
In addition, ConAgra also gets production and distribution facilities in Newport, Tenn., where the two brands are produced. Wolf Brand and Van Camp's will be operated under ConAgra's Hunt Foods Co., a Fullerton, Calif.-based independent operating arm of Hunt-Wesson Inc.
Company gets OK to test
E. coli vaccine on humans
FDA has given the go-ahead to a company that makes and markets animal care products to begin the first phase of human testing of a vaccine against E. coli 0157:H7.
Beuna, N.J.-based IGI Inc. expects that its Ecovax 157 liquid vaccine, to be administered orally, will be the subject of a lengthy regulatory approval procedure. A company official would not predict when the drug might receive final approval.
Tests of Ecovax 157 in cattle and poultry have shown marked increases in the production of antibodies that combat the endotoxin produced by E. coli 0157:H7. IGI eventually wants to market the vaccine to people who are particularly susceptible to infection. Children, the elderly and the immuno-compromised are most susceptible to E. coli 0157:H7.
In time for summer, the Beef Industry Council of the National Live Stock and Meat Board has released new advertising themes based on the "Beef. It's What's For Dinner" campaign. Four new print ads, including the above Fiesta Beef Steak, promote easy recipes, many of which contain five or less ingredients, according to Francis Gregerson, BIC advertising subcommittee chairman. In addition, beef recipes are also the focus of new television advertisements that began last month. The ads are supported with summer grilling recipe centers in supermarkets.