Cargill to acquire ground beef processing plant in Texas

American agribusiness company Cargill is set to acquire a ground beef processing plant in Texas, US, from AFA Foods for $14.1m, as part of its $100m investment plan to strengthen its existing beef business in Texas.

The transaction, which includes the purchase of all working capital assets of the plant, has received court approval, and is expected to be completed next week.

Cargill noted that it plans to retain 250 full-time jobs at the facility and also invest further in order to ensure the plant’s competitive viability.

The facility, located in Fort Worth, will be part of the Cargill Value Added Meats Food Service unit of Cargill, which caters to customers across the US and Canada.

It will produce ground beef patties and a variety of ground beef packaged products for both retail and foodservice sectors.

Cargill Value Added Meats Food Service president Mary Thompson said that the Fort Worth facility has a track record of producing quality products and offers benefits such as geographic advantage to retail and foodservice customers, proximity to raw materials, and access to growing regions.

"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," Thompson added.

As a part of the $100m investment, Cargill purchased a hog production facility near Dalhart and constructed a livestock feed production plant at Bovina over the last 15 months.

In addition, for fiscal 2012 and 2013, the company has committed an investment of $20m at its beef processing facilities in Plainview and Friona, Texas.

AFA, based in King of Prussia, Pennsylvania, filed for Chapter 11 bankruptcy in April 2012 after its revenues declined following public concern over the use of a meat additive dubbed ‘pink slime’.