Articles in this document:

· New life planned for pork plant

· New Producer-Owned Beef Plant for Winnipeg

· MCEC Funds Purchase of Plant for Manitoba Beef

New life planned for pork plant

Manitoba company has eye on conversion

By: Larry Kusch

Winnipeg Free Press - Canada

July 28, 2008

A Manitoba company plans to convert the former Maple Leaf pork processing plant at 663 Marion St. into a beef processing facility.

Natural Prairie Beef, owned largely by Manitoba beef producers, will initially use the plant to process cuts of premium-brand naturally raised (hormone-free) beef.

It plans eventually to turn the plant into a modern, mid-sized, federally inspected beef slaughtering and processing facility capable of marketing Manitoba beef anywhere in the world, according to the Manitoba Cattle Enhancement Council, a partner in the plant.

The MCEC administers an investment pool that is funded by a levy on all cattle sold in the province.

The council said in a press release this morning that it has doubled its stake in Natural Prairie Beef to $2.4 million. Last fall, it invested $1.2 million to help kick-start the project.

However, the location of the proposed plant had not been announced until today.

The enhancement council said its investment helped Natural Prairie buy the St. Boniface facility. A sale price was not immediately disclosed.

After an initial set of plant upgrades are completed this fall, the company expects to begin marketing cuts of beef to Manitoba retailers and (directly to) consumers late in the year. It will employ only 15 to 20 people at that time.

The company expects the plant will employ 80 people by 2010, once it completes renovations and ramps up production.

Plans call for the completed plant to have the capacity to process 250 head of cattle per week, although that volume could easily be doubled through further upgrades, the MCEC said in its release.

“We’re very pleased to have MCEC add to their initial investment as we take this operation to the next level,” said Kelly Penner, president and CEO of Natural Prairie Beef.

“Our business plan calls for a conservative, phased-in approach. At the end of the day, we’re confident that we’ll be able to build a successful global brand for premium Manitoba beef.”

Bill Uruski, the former provincial NDP cabinet minister who chairs the cattle enhancement council, said Manitoba producers were “all but shut out” by Alberta and Ontario beef slaughter plants when the U.S. closed its borders to Canadian beef during the 2003 BSE crisis.

“They had no place to take their animals and it nearly ruined our beef industry,” he said in a statement.

That prompted the province to establish the MCEC to invest in new beef slaughter and processing capacity.

With a new Manitoba plant in the works, Uruski said, “we’re very close to being able to say, ‘Never again.’”

winnipegfreepress.com

New Producer-Owned Beef Plant for Winnipeg

Natural Prairie Beef Inc. targeting niche export markets for premium products

Source: Natural Prairie Beef Inc.

Jul 29, 2008 08:00 ET

via MarketWire

WINNIPEG, MANITOBA--(Marketwire - July 29, 2008) - Natural Prairie Beef Inc. announced today it has purchased a former Winnipeg meat processing plant and begun to upgrade and redevelop it to produce premium-branded Manitoba beef. Following a new business model for the Canadian beef industry, the producer-owned company will target niche markets and own more parts of the value chain from gate-to-plate.

The first phase, which is expected to begin operations by the end of 2008, will employ 15-20 people and focus on processing value-added beef products for local markets. The company plans to renovate and upgrade the plant completely over the next two years to create a federally-inspected beef slaughtering and processing facility that will market premium beef products across North America and into Asia and the European Union. The plant is expected to employ about 80 people when complete.

"This is a major step forward for Natural Prairie Beef and for the Manitoba cattle industry," said Kelly Penner, President and CEO of Natural Prairie Beef. "We are moving our business plan forward to create a high quality, vertically-integrated operation that will target growing, lucrative niche markets. We are looking forward to introducing our product to Manitoba dining tables later this year and to the rest of the world by 2010."

The company has already begun upgrading the former pork processing plant at 663 Marion St., which it purchased from Maple Leaf in July. Once it is up to full speed in 2010, it will handle 250 head per day and will be easily upgraded to 500 head per day. Natural Prairie is currently finalizing financing arrangements with other partners and lending institutions.

It will be the first new federally-inspected beef facility for the province in more than a generation and the first to service export markets. One of the key markets for the company is raising and processing Natural beef. Natural beef is raised without hormones and antibiotics, and delivers a healthy, high quality great tasting product. Natural Prairie will also accept conventionally-raised cattle to target the growing kosher and halal markets in Canada, the U.S. and in certain export markets, both of which call for strict processing requirements to meet both religious and health standards.

"We've conducted extensive research to create a business plan that we believe addresses the risks associated with entering a competitive industry," said Penner. "We're building a highly efficient operation with a focus on niche markets. That will help us avoid competing against the industry's major packing companies."

Producer Owned

Natural Prairie Beef is a private company owned by 50 Manitoba beef producers. The Manitoba Cattle Enhancement Council has invested $2.4 million in the company to help it bring the plant on stream for the benefit of the province's beef industry. MCEC administers an investment pool that is funded by

Manitoba cattle producers through a $2 per head levy on every animal sold. The provincial government matches producers' contributions, turning every $2 into $4.

"We're very pleased to have MCEC on board as an equity investor in our company," said Penner. "This project wouldn't be possible without the strong support and guidance we've received from the council."

"This is a solid investment for MCEC. It's a great step forward towards opening new markets for Manitoba beef," said MCEC Executive Director Kate Butler. "Being located centrally in Winnipeg helps minimize transportation costs for the plant and for producers. It's also going to benefit from Winnipeg's labour pool. And we were pleased that the plant has already passed a critical environmental assessment."

Traceability and Quality

The plant will employ the latest technology to trace every animal from gate to plate. This process allows the plant to capture significant efficiencies and assures consumers that every animal is of the highest quality. This is critical to address food safety.

"Consumers today are looking for healthier, high quality, great tasting food products," said Penner. "We're investing in the best systems possible to make sure that our beef will stack up against any other brand in the world."

High Environmental Standards

The company is committed to ensuring the renovated plant meets or exceeds all environmental standards. The plant passed a rigorous Phase II environmental assessment earlier this year. Independent engineers have stated that the plant will produce significantly less waste than it did previously.

"We're holding ourselves to very high environmental and community standards," said Penner. "We're developing a first-class facility that will use the latest technology. We're also committed to continuously searching out new ways to reduce waste."

The company is working closely with the City of Winnipeg and Manitoba Conservation to ensure it meets or exceeds all environmental regulations. It also plans to host a public open house later this year to give its neighbours and the broader community an opportunity to learn more about Natural Prairie Beef.

Founded in 2004, Natural Prairie Beef Inc. raises and markets cattle under its Natural branded beef program. For more information on the company, please visit www.naturalprairiebeef.ca.

For more information, please contact

Natural Prairie Beef Inc.

Kelly Penner

President & CEO

(204) 729-6138

Website: www.naturalprairiebeef.ca

marketwire.com

MCEC Funds Purchase of Plant for Manitoba Beef

Increases investment in Natural Prairie Beef Inc.

Source: Manitoba Cattle Enhancement Council

Jul 29, 2008 08:00 ET

via MarketWire

WINNIPEG, MANITOBA--(Marketwire - July 29, 2008) - The Manitoba Cattle Enhancement Council announced today it has increased its investment in Natural Prairie Beef Inc. by $1.2 million. This has enabled the purchase of a former meat processing plant, which the company plans to upgrade as a new beef processing facility.

The investment by MCEC allowed the company to purchase the former Maple Leaf pork processing plant at 663 Marion St. It follows MCEC's previous investment of $1.2 million, made in October 2007, bringing the council's total investment in the company to $2.4 million. After an initial set of plant upgrades are complete this fall, Natural Prairie expects to begin processing premium-branded, naturally-raised Manitoba beef. The company expects to begin marketing its products in Manitoba through retailers and direct to consumers in 2008.

The company is ultimately planning to turn the plant into a modern, mid-sized, federally-inspected beef slaughtering and processing facility capable of marketing Manitoba beef anywhere in the world. The company is currently in the process of finalizing further financing before it proceeds with a complete plant renovation to Canadian Food Inspection Agency standards. MCEC will consider investing additional equity into the operation to help it bring Manitoba beef products to market.

"This is a major step towards the creation of a new federally-inspected processing plant in Manitoba," said Bill Uruski, Chair of MCEC. "Over the short-term, this plant will be developing new markets for Manitoba beef. Over the long-term, the goal is to market our beef to the world and that is vital for the success of our provincial cattle industry."

Targeting Niche Markets

The company plans to target niche markets that have demonstrated growing demand, including sales of Natural (hormone-free) beef and kosher beef in North America. By focusing on niche markets, Natural Prairie will avoid having to compete directly with the industry's major commodity-driven packers. Plans call for the completed plant to have the capacity to process 250 head per week. It would be easily upgraded to handle up to 500 head per week.

"This is excellent news and a solid investment by MCEC," said Kate Butler, MCEC's Executive Director. "Our council will continue to work closely with Natural Prairie to help them turn their vision for this plant into a reality for the benefit of Manitoba producers."

"We're very pleased to have MCEC add to their initial investment as we take this operation to the next level," said Kelly Penner, President and CEO of Natural Prairie Beef. "We're nearly there. Our business plan calls for a conservative, phased-in approach. At the end of the day, we're confident that we'll be able to build a successful global brand for premium Manitoba beef."

"In anticipation of future plant upgrades, we're currently working closely with the City of Winnipeg and Manitoba Conservation to ensure the new plant meets or exceeds all environmental standards. We're pleased to note that, when complete, the renovated plant will produce significantly less waste than it used to, and that it recently passed a tough Phase II environmental assessment," said Penner.

The plant will employ 15-20 people starting in late 2008. The company expects the plant will employ about 80 people by 2010 once it completes renovations and ramps up production.

In addition to processing 'Natural' beef, the plant will also accept conventionally-raised cattle. In addition, it will include a sophisticated system to trace the animals from 'gate-to-plate' so customers can be assured of their quality.

Protection Against Future Border Closures

Of MCEC's total $2.4 million investment, the original $1.2 million was made up of $750,000 in short term debt and $450,000 in equity to help develop new markets. The new $1.2 million is an investment to enable the purchase the plant, secured by a full mortgage on the property.

MCEC has also negotiated the right to convert the debt to equity and suspend its dividend at its option in exchange for rights to hook space at the facility. This hook option could be of benefit in the event of a border closure or similar crisis because the hook rights are assignable by MCEC to Manitoba producers who have supported the MCEC program.

"When the BSE crisis shut the border in 2003, Manitoba producers were all but shut out of plants in Ontario and Alberta. They had no place to take their animals and it nearly ruined our beef industry. We're very close to being able to say: never again," said Uruski. "Our council's mandate was to create programs that enhance our cattle industry. We'll continue to seek out opportunities to do so."

"We have to be as smart as we can in our approach," said Butler. "Targeting niche markets such as kosher, halal and Natural beef makes sense and this plant was a good opportunity when it came on the market."

"The plant was desirable for three main reasons," she said. "First, it will benefit from Winnipeg's central location and its close proximity to major highways, railways and an international airport. The location can help minimize transportation costs for producers and Natural Prairie. Second, the company will also benefit from the city's large and stable labour pool. And third, the plant has already passed a critical environmental assessment."

The MCEC began operations in 2006 with a mandate to support made-in-Manitoba solutions for a long-term, viable beef industry in Manitoba. The council administers an investment pool that is funded by a $2 per head levy on all cattle sold by Manitoba producers. The province is matching the levy for the first three years so every $2 becomes $4. The council's goal is to invest in initiatives that will lead to increased slaughtering and processing capacity, or that will enhance the market for value-added cattle products. For more information on the council, please visit www.mancec.com.

Illustrations of the plant available on request.

For more information, please contact

Manitoba Cattle Enhancement Council

Kathleen Butler

Executive Director

(204) 452-6353

Website: www.mancec.com

marketwire.com