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

Prev Next Index