ABERDEEN, S.D. (AP) -- A northern South Dakota beef processing plant is laying off 108 of its 420 employees until it can raise enough money to buy more cattle, the company's top executive said Thursday.
David Palmer, president and chief executive of Northern Beef Packers, said the plant has raised more than $150 million, but it's putting a planned ramp up on hold until it can raise about $20 million more in working capital, which is used to fund operation. He said the plant is working with additional foreign investors, international trading companies, established food companies and financial investors.
Palmer called it an "unfortunate setback" but said during a news conference Thursday afternoon that the company is "confident that is only a temporary one."
Northern Beef Packers is currently processing about 200 cattle a day from the Dakotas, Nebraska, Iowa and Minnesota. The plant hopes to eventually process 1,500 cattle per day.
Palmer said the affected employees were notified Thursday afternoon. He said the goal is to hire them back by late July.
"They're all good employees," he said. "We want them back."
Land for the 420,000-square foot facility in Aberdeen, which began slaughtering cattle last fall, was secured in 2006. Financial issues, lawsuits, local opposition, delinquent property taxes, flooding, an economic downturn and millions of dollars in liens repeatedly pushed back the opening date. The plant was given new life when Korean investors took over in 2009.
Northern Beef Packers plans to use nearly all of each animal, producing both U.S. Department of Agriculture certified meat cuts and offal, which is in high demand in foreign markets. An onsite rendering plant will open later.