American agribusiness company Cargill is set to acquire ground beef processing plant in Texas,US,from AFA Foods for$14.1m,in a deal that will strengthen its existing beef business.
The deal,which includes the purchase of all working capital assets of the plant,has received court approval,and the sale is expected to be completed next week.
Cargill noted that it plans to retain 250 fulltime jobs at the facility and also invest in order to ensure the plant's competitive viability.
The plant,located in Fort Worth,will be a part of Cargill Value Added Meats Food Service unit of Cargill,which caters to customers throughout the US and Canada.It will produce ground beef patties and a variety of ground beef packaged products for both retail and foodservice sectors.
Cargill Value Added Meats Food Service president Mary Thompson said that Fort Worth facility has a track record of producing quality products and offers benefits such as geographic advantage to retail and foodservice customers,proximity to raw materials,and access to growing regions.
"This is a strategic acquisition that complements our existing beef production and distribution infrastructure and better positions us to meet our goals for both short-term and long-term profitable growth,"Thompson added.
Cargill,over the past 15 months,has announced plans to invest$100m in Texas in order to strengthen its animal protein businesses,including the purchase of a hog production facility near Dalhart,construction of a livestock feed production plant at Bovina,and acquisition of Fort Worth beef processing facility.
In addition,for fiscal 2012 and 2013,the company has committed an investment of$20m at its beef processing facilities in Plainview and Friona,Texas.
AFA,based in King of Prussia,Pennsylvania,filed for Chapter 11 bankruptcy in April after its revenues declined following public concern over the use of a meat additive dubbed'pink slime'.The company,which adds the meat additive to its ground beef products,experienced a sharp drop in the demand for its products,which affected the seasonal rebound in sales.
