The company bid $14.1 million for the facility and working capital assets. The former AFA Foods facility was part of a bankruptcy court auction.
AFA, based in King of Prussia, Penn., filed for Chapter 11 bankruptcy protection on April 2, citing changes in the market for ground beef and the impact of the controversy over lean finely textured beef (LFTB). AFA was a competitor of Beef Products Inc., another producer of LFTB that was embroiled in the LFTB controversy.
A federal bankruptcy court approved AFA Foods’ plan to sell two of its five processing plants to separate buyers. FPL Food LLC bought the company’s Thomasville, Ga., plant for $7.3 million and its Los Angeles plant was sold to Tri West Investments for $4.4 million, according to media reports.
Cargill sees the acquisition as a strategic fit for its operations. Cargill Value Added Meats Food Service has customers throughout the US and Canada. The Fort Worth plant will produce ground beef patties and a variety of ground beef packaged products for both retail and foodservice sectors. The company also plans to keep approximately 250 full-time ground beef production positions at the facility.
“We’re thrilled to be the winning bidder for the Fort Worth facility due to its track record of producing quality products and satisfying customers, its geographic advantage to our retail and foodservice customers, its proximity to raw materials and its access to growing regions,” said Mary Thompson, president of the Cargill Value Added Meats Food Service business. “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.”
Cargill has announced roughly $100 million of investments in Texas to support the company’s meat business, according to media reports. Investments include the acquisition of a hog production facility near Dalhart, Texas, construction of a livestock feed production facility at Bovina, Texas, and the former AFA beef processing plant. Cargill also has earmarked $20 million in investments for beef processing facilities in Plainview and Friona, Texas, according to the company.
