Thursday, July 28, 2011

The Harim USA Ltd Purchase Of Allen Foods

I read where a federal bankruptcy court judge has approved the sale on Wednesday for the purchase of Allen's assets by Harim USA Ltd. The bid price at the bankruptcy auction was $48 million plus the cost of inventory. Allen filed for bankruptcy on June 9 with $83 million in debt. Harim USA Ltd is a division of Harim Holdings Co. Ltd, a South Korean poultry firm headquartered in Iksan, 230 kilometers south of Seoul.

Frankly I think it is a good deal. In the USA, Harim is a new guy and should upset the basket with different ways. Certainly Gov. Markell should be happy as he works to get foreign companies to invest in Delaware. I am sure he has a few million to give to Harim as incentives for jobs. The amount Delaware pays for job creation seem to run between $17,777 to a low of $8,617 per position. Anyway with fall approaching it is a good time for the transition as Chicken sales traditionally are down in the fall so renovations and organization changes can be made in this period.

So another company is owed by a foreign company. With the dollar having such little buying power other countries with stronger dollars are finding this place good pickings. We will once again move down the ladder another rung to a third world power known for cheap labor.

Allen is the second chicken company to enter bankruptcy liquidation in the last eight months. Townsends Inc., which also had headquarters in Delaware, filed its petition last year. Townsends subsequently was split up in sales to Omtron Ltd., a U.S. equity investor formed by Ukrainian entrepreneur Oleg Bakhmatyuk, and U.S. chicken integrator Peco Foods Inc.

Pilgrim's Pride Corp., then the largest chicken producer in the U.S., filed for bankruptcy protection due to high costs, low prices and staggering losses and exited bankruptcy after selling a majority of the company to JBS USA, the U.S. business of Brazilian meat processor JBS S.A.

Last year, Brazilian meat processor Marfrig Alimentos S.A. acquired Keystone Foods LLC, the ninth-largest chicken company in the U.S., to establish its operating platform in the U.S.

Certainly, there are enough foreign owed or controlled grocery stores in the area and what could be more Eastern Shore than Softshell crabs and Handy Seafood in Crisfield, MD was owned by Taiyo Oil Co., Ltd. of Tokyo, Japan until Terrence Conway purchased it in 2000.

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