Day 068 - 16 Dec 94 - Page 23
1 A. That is correct; the patty manufacturing plant, yes.
2
3 Q. Patty manufacturing plant. Is that for anyone in Costa
4 Rica or is that only for McDonald's?
5 A. No. It is their facility. Within that facility we
6 have a separate area for McDonald's.
7
8 Q. That separate area for McDonald's, that is within that same
9 plant?
10 A. That is correct.
11
12 Q. It is a separate line?
13 A. Exactly right.
14
15 Q. Has that area got a name, or is it just known as the
16 "McDonald's area"?
17 A. It is the McDonald's area.
18
19 Q. That is quite an unusual facility, is it, in a process
20 plant, to have a special -----
21 A. No. It is very common for us to have, in those kinds
22 of situations where -- we only have 10 restaurants in Costa
23 Rica; our volumes are not very good. Our cost, if we had
24 dedicated plant, would be cost prohibitive. So what we do
25 in some of those cases where we have very limited number of
26 restaurants, we have our own section, for economic reasons
27 and, more importantly, so that we can control that area.
28 We cannot control a total facility.
29
30 MR. JUSTICE BELL: So you do not just want to buy a proportion
31 of what the processor produces, because you want control
32 over that line yourself. On the other hand, your
33 quantities are not sufficient to set up your own individual
34 processing supplier?
35 A. That is correct. Our equipment that we use for
36 manufacturing our beef, it is state of the art equipment.
37 That is one of our requirements.
38
39 Q. So you put your own equipment in their plant?
40 A. We do not put our own equipment. We buy the equipment
41 and we make an agreement with the supplier that we pay the
42 cost of that equipment. For example, the equipment that
43 they have in Costa Rica costs about $1 million, just on
44 equipment itself.
45
46 Q. So it is actually their equipment, their employees, but you
47 help them fund the higher standard of equipment, and you
48 can supervise the way it is run?
49 A. That is correct.
50
51 Q. That is your own?
52 A. That is the way we do business anywhere else.
53
54 MR. MORRIS: So when this separate McDonald's line was set up,
55 they had to buy this new equipment, you had to do an
56 arrangement with them for new equipment?
57 A. They do not have to buy it. For instance, I would go
58 there, make a recommendation to say: "In order for you to
59 produce the quality patties that we are looking for, to
60 ensure that that product is safe, you have to have these
