Jeff City firm revives pork plant
Organic producer plans to turn Pleasant Hope site into headquarters
Monday, December 08, 2008 5:33 AM
A new partnership between Tai Shin Foods USA and a Jefferson City-based company specializing in humanely raised pork is poised to revive Tai Shin's Pleasant Hope hog-processing plant after months of dormancy.
Former Missouri Lt. Gov. Joe Maxwell now runs Jefferson City-based Heritage Acres Foods, which is seeking pork producers in southwest Missouri and northern Arkansas whose farms align with sustainable agricultural standards.
The 100,000-square-foot Tai Shin plant in southern Polk County celebrated its grand opening in June - some eight years after owner James Hsu and his family purchased an unused beef processing plant at the site.
Hsu had big plans for the operation, which started out with 74 workers processing about 200 hogs a day. Expansion plans called for 300 employees processing 2,000 hogs daily for export markets in Taiwan, Japan and Vietnam. But by July, activity at the plant had lulled.
Hsu did not return calls for this story, but Joe Maxwell, CEO of Heritage Acres Foods LLC, said his company has agreed to lease the Tai Shin plant, which will serve as Heritage Acres' new headquarters and its Midwest distribution hub for organic pork and beef products.
Natural pork niche
Maxwell - former lieutenant governor under Gov. Bob Holden - said Heritage Acres is a "vertically coordinated" network of family farmers who raise antibiotic- and hormone-free, grain-fed hogs that aren't confined to metal enclosures. The company's precursor was the Ozark Mountain Pork Cooperative, which operates a processing plant in Mountain View.
In three years, Heritage Acres has grown the number of its farms and established a solid customer base that includes Chipotle, a Denver-based fast-casual burrito chain, and Whole Foods Market, an Austin, Texas-based natural food retailer. Heritage Acres also supplies Hickman's, a small grocery store chain in northeast Missouri.
Heritage Acres will purchase hogs from more than 70 producers in Missouri, Iowa, Illinois and Indiana for processing at the Pleasant Hope plant, Maxwell said. The plant will initially process between 1,400 and 1,500 hogs each week, but the company hopes to increase weekly production by about 1,000 hogs early on.
Most of the company's in-state producers are in northeast and south-central Missouri, but Heritage Acres officials are seeking additional producers in southwest Missouri and northern Arkansas whose farms align with their sustainable agricultural standards.
Maxwell said his company's business plan is double-pronged: Give in-state livestock producers a revenue stream at a time when vertically integrated processors are pulling out of the Show-Me State, and provide consumers with high-quality, natural food products.
"We get more and more concerned every day about who's really raising and processing our food," he said. "Heritage Acres' goal is to move safe, source-verified food directly to consumers - from farm to tables."
Bruce Johnson, an agricultural economics professor at Missouri State University, said options are limited for regional hog producers facing two main issues: the economies of large-scale, assembly-line production and corporations interested in contracting for the production and delivery of a large number of hogs.
"You can be independent or you can be integrated with one of these large processors, but either way you're looking at size requirements," he said.
Controlling costs associated with raising hogs for organic pork products also might be difficult for smaller producers in the area, Johnson noted.
"I think the positive part is (Heritage Acres is) hooking in to a national trend for consumers wanting organically produced products," he said. "I guess the negative part is we're not an area that produces grain efficiently. You're going to have to import the grain, so you've got a significant transportation cost."
Tai Shin Foods & Frozen Industrial Co. is an 85-year-old Taiwan-based company that was founded by Hsu's grandfather.
In 1999, Tai Shin was forced to look for expansion opportunities overseas after a foot-and-mouth disease outbreak in Taiwan led to a ban on pork produced in that country. Through the Missouri Department of Agriculture, Hsu learned of three prospective properties in Missouri, including the defunct processing plant near Pleasant Hope.
Tai Shin has invested more than $6 million in the Polk County plant, which opened this summer after eight years fraught with delays. But despite the high hopes of Hsu and Plant Supervisor Todd Mowery, the plant didn't meet expectations.
Maxwell said Tai Shin officials contacted Heritage Acres several months ago in its quest for more orders. At the time, Heritage Acres was exploring a partnership with other companies and had been visiting plants throughout Missouri in hopes of boosting its processing capacity, he said.
"These are tough economic times, and finding people that can bring synergy to make something work is how we're going to be profitable," Maxwell said. "We're businessmen and farmers and producers. ... James' family has been in the export pork business for longer than any of us, and we need those skills."
Maxwell said Heritage Acres and Tai Shin inked an agreement Nov. 10 that details terms of the lease and transfers plant management duties to Heritage Acres Chief Operating Officer Russ Kremer, an Osage County hog farmer and original member of the Ozark Mountain Pork Cooperative. Mowery will remain plant supervisor, Maxwell added.
Hsu has joined forces with the Heritage Acres marketing staff and will actively seek new accounts for the company's niche products, Maxwell said, adding that Hsu and his family will receive a portion of profits.
Denver, New York City, Chicago and San Francisco are currently the largest markets for Heritage Acres products, Maxwell said.
Heritage Acres officials have been testing equipment at the Tai Shin plant, which Maxwell said should be up and running in January.
Penmac, a Springfield-based human resources firm, will continue to handle employment and related responsibilities at the plant. About 21 workers are on the payroll, and Heritage Acres plans to gradually grow employment in the first and second quarters of 2009, Maxwell said. By spring, he said, the company plans to employ between 70 and 100 people.
At a time when very few companies are hiring, that's good news for Pleasant Hope - a small town looking to grow its existing businesses and attract new ones.
The Tai Shin-Heritage Acres partnership should help the underutilized plant reach its full potential in terms of production and job creation, said Angie Mullings, who helped launch the Pleasant Hope Chamber of Commerce in 2006 and advises the board of directors.
"We're thrilled to have any jobs we can get ... with the economic downturn," said Mullings, a Realtor with Century 21 Integrity Group in Springfield. "It's been a roller coaster when it comes to job creation and getting that (plant) up and running. We always knew something was going to happen. They have an outstanding facility there, so it would be a shame for it to sit there idle. I think this new partnership with Heritage Foods will be the answer."
Mullings said Heritage Acres may be able to tap into a pool of skilled laborers who were laid off in October when the Petit Jean poultry processing plant in Buffalo was shut down. That plant, which had contracted with Arkansas-based Tyson Foods, employed about 465 people.