News last update:Feb 25, 2016

US$255 million pork processing plant planned for Michigan

Clemens Food Group, of Hatfield, Pa., plans to build a $255 million (€204.56 mln) pork processing plant in Coldwater, Michigan, which will employ 810 workers.

The 550,000 square-foot new pork processing facility will be located in Coldwater Township. And is expected to be operational by late 2017.

Clemens Food Group considered both Michigan and Ohio for a Midwest expansion of its pork processing operations, choosing Michigan for the location of the facility based on the state and community support as well as site feasibility and labour force preparedness.

Michigan lost its last major pork processing plant when Thorn Apple Valley shut down its Detroit slaughterhouse in 1998, a year before collapsing into bankruptcy. Since then, Michigan farmers, who produce more than 2 million market hogs per year, have shipped them out of state for processing.

The Michigan Department of Agriculture and Rural Development (MDARD) worked with a group of Michigan pork producers for approximately three years considering the merits of siting a pork processing plant in Michigan. The producers used a $100,000 (€80220.45) MDARD grant to conduct a feasibility assessment for a pork processing plant in the state.

Based on that analysis, MDARD and the producers pursued a strategy to find a business partner with expertise in marketing and value creation as an integral part of its business model and to create a relationship with this partner that would benefit the industry here in Michigan. This feasibility assessment was essential in building the processing partnership with Clemens Food Group.

Founded in 1895, the Pennsylvania-based Clemens Food Group is a sixth-generation, family-owned integrated pork production operation including farming, processing, transportation and logistics. The company has a total of 2,200 employees.

A key to the success of the project was the collaboration of Coldwater and Coldwater Township on a land transfer agreement. The transfer will allow the City of Coldwater to contribute $4.5 million (€3.61 mln) toward the project for infrastructure improvements at the site, including water and sewer main extensions and a new municipal electric overhead distribution line. That support, along with MSF CDBG approval, is part of an overall package of local and state support that will total $55 million (€44.12 mln). This also includes nearly $16 million (€12.84mln) in tax savings as a result of the recently approved personal property tax reform.

Michigan Strategic Fund (MSF) has approved $12.5 million (€10.03 mln) in Community Development Block Grant funds for the City of Coldwater for infrastructure improvements, land acquisition, workforce development and on-the-job training for the new development.

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