Thursday 20 February, 2020

Sweet River seeks 'guidance' over loss of abattoir

The Westmoreland-based meat processing firm went to the market with an IPO in 2014, raising $180 million of equity to assist the company in expanding its processing facility.

The Westmoreland-based meat processing firm went to the market with an IPO in 2014, raising $180 million of equity to assist the company in expanding its processing facility.

Chairman of Sweet River Abattoir and Supplies Limited, Henry Graham, has indicated in a notice via the Jamaica Stock Exchange that the company is “seeking guidance” concerning the sale of its abattoir, located in Westmoreland, by public auction last year November.

The company is in the business of slaughtering and performing first-level processing of pigs. The company also had plans to add sheep and goats for processing and sale.

However, the abattoir facilities were sold last year to Restaurant Associates when Sweet River’s banker, First Global acted over unpaid loans.

Graham also said that the company is continuing operations and is being restructured. The restructuring was delayed by the auction.

Loop News reached out to clarify the concerns about the auction, but Graham did not respond to that query up to press time.

In the statement to the stock exchange, Graham indicated that further updates on operational changes, as well as the company's delayed financials, will become available in due time.

Meanwhile, Restaurants Associates CEO Richard Lake said the property will be transferred before the end of January and operations at the abattoir will begin in short order, with the company producing value-added products.

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Sweet River and Supplies encountered problems which led to the erosion of its capital base, repeated losses and an inability to service debt.

In 2018, it responded to oversupply of pork to which it responded with steep discounting. In that year it also proposed to develop new contracts from the hotel sector, as the basis of increasing demand.

However, loans owed to First Global Bank were called early in 2019 and a brand new abattoir on which the company had spent millions was lost to the auction.

Sweet River is listed on the Junior Market of the Jamaica Stock Exchange.

Rhe Westmoreland-based meat processing firm went to the market with an IPO in 2014, raising $180 million of equity to assist the company in expanding its processing facility.

The company, previously owned and operated as a part of a GraceKennedy and Company Limited subsidiary for some 40 years, was incorporated as Sweet River April 2, 2009. The majority of shareholders in the company were pig farmers. The IPO offer represented about 46 per cent of its authorised share capital.

The company acquired lands in the Sweet River area of Westmoreland in 2012 for construction of the 12,000 square feet "state-of-the-art abattoir.”

The new facility included a modern semi-automated slaughter line, chill room and freezer facilities, breakdown and storage facilities, and provided throughput capacity of 250 to 300 livestock per day.

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