A discouraging outlook for fruit plant

Apr 11 2008
Time is running out for tender fruit producers as they wait to hear if the only fruit canning plant in Canada will continue to operate for the 2008 season. While there are currently two prospective buyers, a successful business plan would require cooperation between three levels of government, the buyers, growers and the United Food and Commercial Workers union (UFCW).
by KATE PROCTER
“It is heartbreaking for all of us. It certainly isn’t for lack of effort,” says Niagara Falls MPP Kim Craitor. Current owners, CanGro, announced that they will be shutting the plant, which leaves local growers few options but to stop producing.
Saving a plant, however, is a complex process, says Craitor. There are many groups with an interest in keeping it operating but no one has brought all the players to the same table.
Craitor says all three levels of government are now looking for commitment from growers and the UFCW before committing the money needed to bail out the plant. Government has been burned before by contributing money to save manufacturing jobs, only to have the owners pull up stakes and move equipment south of the border two or three years after the cash was received.
“Growers have not been contacted directly by any potential buyer. All contact has been through Niagara-On-The-Lake Lord Mayor Burroughs. The reply to Mr. Burroughs has always been consistent – our growers are emphatic – they want the plant to stay open provided they receive a fair price for their fruit and are assured of payment,” says Adrian Huisman, who manages the Ontario Tender Fruit Board (OTFB) and Ontario Fresh Grape Board and is an advisor for the Ontario Apple Growers.
“No one, at this point, has attempted to bring all parties together. We are available at a moment’s notice,” he says. The OTFB says growers are in favour of the plant staying open, but they need assurance that the pricing of the raw products is acceptable and that will be paid.
While growers appreciate the short time frame and recognize that it is difficult for governments to move things through their systems quickly, they have imminent production decisions to make. Peach trees need to be sprayed and pruned before bud break, which is expected before the end of April.
Marketing the product is one of the big issues, explains Craitor. He says that CanGro keeps the label, which is recognized by consumers, and the buyer of the plant will be facing a competitive market without a recognized label.
The current prospective buyers are interested in using all local produce in the plant, which provides a competitive disadvantage in itself, says Craitor. Offshore produce can be brought in at a substantially lower price because wage rates are lower and Canada has higher standards for pesticide and water use.
In the meantime, those working at CanGro’s plant in Exeter were told this week thatplant would close. The plant processes peas and corn.
In January, CanGro Foods Inc. announced it planned to shut the two plants on Mar. 31 if buyers couldn’t be found. The company's third Ontario plant, located in Dresden, is unaffected.
In its January announcement, the company announced plans to outsource its canned vegetable and fruit requirements.
CanGro markets canned fruit, tomatoes and vegetables under Del Monte, Aylmer and Ideal brands.
In May, 2007, it sold its Aylmer and Primo brand soup business to Baxters Canada Inc. BF