SK Foods' sale welcome news for tomato growers

SK Foods, the beleaguered tomato processing company with a plant in Williams, was sold Friday to an international company that distributes agricultural products.

Olam West Coast, a subsidiary of Olam International Limited, bought the company as part of a bankruptcy court proceeding in Sacramento.

The sale comes just ahead of a deadline at the end of this month for SK Foods to be sold in order to fulfill contracts it has to process tomatoes through the end of the growing season from farmers in Colusa, Sutter and Yolo counties.

"It's very good news," said Woody Yerxa, a tomato grower in Colusa and Sutter counties. "Based on the price of the crop at $80 per ton, that would've been an $800 million loss in California otherwise."

He added with so many other businesses in Colusa County dependent on agriculture, the ripple effect would have been noticeable.

Mike Montna, president and CEO of California Tomato Growers Association in Sacramento, said the sale is good news because tomato farmers would have had few options otherwise.

"They would've been without a home," Montna said, and begging to see if other processors had an excess capacity that could handle them.

Given the expected size of the tomato crop this year, Montna said, that might have been difficult.

"I can tell you from the grower's perspective locally, they're relieved to have a place to deliver the crops the next few weeks," he said.

In a press release, Singapore-based Olam said SK Foods would pair well with Olam's existing spice and dehydrates business, which already operates elsewhere in the Central Valley.

"This acquisition will improve Olam's competitive position in the dehydrated vegetables business and provide an accelerated entry as the number two processor in the California tomato industry," said Olam Americas President John Gibbons in the release.

Yerxa said he wasn't concerned about dealing with a global company rather than California-based SK Foods.

"I understand they're a very large trading company," he said. "I assume they'll have to compete on the same basis for growers with every other processor out there."

The plant in Williams, under the SK Foods subsidiary RHM Industrial/Specialty Foods, Inc., employs about 300 people during the summer harvest season and processes tomatoes for canning.

In addition to filing for bankruptcy in May, SK Foods' top mangers were the subject of a federal lawsuit alleging corruption and bribery last August.

Three former buyers for the company, which also has a processing plant in Lemoore, pleaded guilty to mail fraud charges in May.

Contact Appeal-Democrat reporter Ben van der Meer at 749-4709 or bvandermeer@appealdemocrat.com.