WWW arkcity.net

By FOSS FARRAR
Traveler Staff Writer
reporter@arkcity.net

Last December marked the one-year anniversary of the discovery of a case of mad cow disease in this country. Nobody was celebrating, particularly not Bill Fielding, chief operating officer of the Creekstone Farms Premium Beef meatpacking plant in Arkansas City.

The anniversary just reminded Fielding how mad he was.

"I get madder every day," he said then.

The mad cow case meant the start of a long struggle for Creekstone, which lost its lucrative business with Japanese customers after that country shut its borders to U.S. beef products.

Creekstone officials said the loss of Asian business resulted in the company's decision to lay off 150 workers in December. That left the plant with 650 employees.

Four months later, Fielding has reason to be a little happier. Creekstone has a new financial owner that is providing resources to allow the company to expand production.

"We've added some (workers)," Dean Hanish, Creekstone's chief financial officer, said. "We've increased our volume output and increased (some workers') hours."

The new majority financial owner of Creekstone is Sun Capital Partners, Inc., one of America's largest private investment firms. Its purchase of a majority interest in Creekstone was announced in early March.

However, John Stewart, Creekstone's chief executive officer and founder, would retain a minority interest and lead the company, said Kevin Pentz, the company's vice president of operations, said at that time.

"We are looking forward to increasing production to five days (a week) next week, from four days," Pentz said. "We are also looking at expanding the operation."

Sun Capital is a "good financial backer which will grow and position us in the market better," he said.

On March 24, more positive news for Creekstone was revealed. Taiwan, the sixth largest market for U.S. beef, announced it would begin accepting U.S. beef products.

"We're pretty excited about Taiwan," Hanish said. "We hope it results in the balance of the Asian market being opened."

Creekstone's biggest Asian market before the mad cow discovery was Japan. Asian markets accounted for up to 40 percent of Creekstone's business.

Fielding, who made personal visits to Japan, had been determined to meet that country's customers' demands that all imported beef be tested for mad cow disease.

In February 2004, Creekstone became the first beef packer in the country to ask the U.S. Department of Agriculture to do voluntary mad cow testing of all the cattle Creekstone slaughters.

Fielding and other Creekstone officials said the testing was not meant to set an industry standard but to satisfy overseas customers. They were stunned when the USDA said rejected the request.

"That's the only thing that would satisfy our customers in Japan," Fielding said. "Seventy-five percent of the Japanese people don't want to buy U.S. beef that has not been tested."

But the USDA and the big U.S. packers said mass testing was too expensive. The USDA added that blanket testing wasn't warranted by science.

Creekstone officials say they won't drop their request to mad cow testing.

"We will continue to aggressively pursue the BSE test (bovine spongiform encephalopathy, or mad cow)," Pentz said, "regardless of whether overseas markets are open or shut."

The name Creekstone is commonly known in Japan, company officials say. Their claim is backed up by members of the media from Japan who have come to Arkansas City this past year to film plant operations and talk to Creekstone officials.

Several small beef industry companies and groups support Creekstone in its request to do mad cow testing. And major newspapers throughout the U.S. have editorialized in favor of Creekstone's plan and against the USDA's stand.

In a press release after the Creekstone ownership change, Stewart reiterated the company's commitment to the local Creekstone operation.

"Our commitment to leadership in our segment, and particularly in natural beef, aligns well with the objectives of our new partners at Sun Capital," Stewart said. "We are now poised to expand and invest operationally as well as continue to strengthen our brand through aggressive sales and marketing."

Stewart said that Sun Capital's significant access to expansion and growth capital will help Creekstone stay on course toward becoming the market leader in the premium-branded beef segment.