Cargill makes Carneco purchase.
Cargill Value Added Meats is expected to close on the purchase of Carneco Foods LLC in January following the Thursday signing of a purchase agreement between the two food processing operations.
The final closing is scheduled for Jan. 2 with Cargill to take over operations beginning Jan. 5. Cargill officials met with Gov. Dave Heineman, Sen. Arnie Stuthman, Mayor Mike Moser and David Bell, co-chairman of the Columbus economic council, Friday to make the announcement.
Bell said: "Cargill is one of the largest companies in the world in ag industry. Cargill becoming the owner will only strengthen the Carneco plant, (including) providing employees with more job security."
Cargill Value Added Meats, a division of Cargill Inc., had been seeking a new operations facility following the destruction of its Booneville, Ark., plant by fire on Easter Sunday. Cargill was approached by Lopez Foods Inc., owner of Carneco, to purchase the Columbus facility, according to John O'Carroll, president of Cargill Value Added Meats.
Although Cargill's initial focus after the fire was site selection for a new plant, O'Carroll said discussions began two months ago regarding Carneco, and the proposition was too good to pass up.
"We had planned to build a plant in Texas," he said, but instead Cargill chose to take advantage of a "beautiful plant in a great state that is pro-business with a tremendous workforce."
Jim English, chief operating officer for Lopez Foods, said the timing is right for the sale of Carneco as Lopez Foods is looking to focus on its fully cooked value added products.
"With the economy being what it is, Lopez Foods is trying to concentrate its efforts on fully cooked, processed foods," English said, whereas Carneco operations "are more in line with Cargill's mainstream business."
"It has been eight terrific years," he said. "Carneco has a great group of people with great management and employees, and we wish them the best with Cargill."
Jeff Dykstra, general manager of Carneco, said the workers were informed of the deal by a joint announcement Thursday, and the arrangement received a positive reception.
"It's a great opportunity because Cargill is a very large, successful company, and everyone here at the plant is happy about it," Dykstra said.
O'Carroll said Cargill will produce frozen ground beef and fresh ground beef products for retail sale and food service from the Columbus facility. He said he does not anticipate any changes to Carneco's current operations.
"I'm really excited about becoming a part of the Columbus community. I think the city has great leadership. This is a wonderful facility with a great work force and great management," he said.
Carneco Foods manufactures frozen beef patties, beef chubs (large sealed packages) and modified atmosphere packaging (MAP) fresh ground beef for fast casual restaurants, retail outlets and the food service industry.
According to the Lopez Foods Inc. Web site, in 2001 Lopez Foods, Inc. entered into a joint-partnership with Tyson/IBP and jointly purchased the Carneco Foods LLC meat manufacturing plant located in Columbus.
Lopez Foods' Oklahoma City facility produces a variety of frozen beef and pork patties, pre-cooked sausage patties and sliced Canadian Style Bacon.
Cargill Inc. is an international provider of food, agricultural and financial and risk management products and services with 160,000 employees in 67countries.
Cargill recently reported net earnings of $1.49 billion in first quarter of its 2009 fiscal year, up 62 percent from $917 million in the same period a year ago.
Cargill opened several new facilities in its first quarter, including an addition to its ethanol production capacity in Blair corn processing complex and a new, frozen beef patty production facility in Fresno, Calif.