Two former Townsends poultry plants to close in NC
August 1, 2011
RALEIGH, NC – Two North Carolina-based poultry plants formerly owned by Townsends are closing early in October, their new owner announced last week. In February, Omtron brought the NC operations of Townsends as part of a $24.9 million deal while Townsends was under Chapter 11 bankruptcy protection, according to The Associated Press. Omtron is a division of Agroholding Avangard, Ukraine’s largest producer of eggs and egg products.
Townsends cited the impact of “record-high feed-ingredient costs on the one hand and low chicken pricing on the other” as the reason for its bankruptcy. It filed for Chapter 11 bankruptcy protection on Dec. 19, 2010.
As a result of Omtron’s latest move, more than 1,000 people will soon lose their jobs, according to The Associated Press. Closing the Siler City and Mocksville plants will also result in ending contracts with approximately 200 chicken farmers in four counties, according to News & Observer of Raleigh.
In February, Ukrainian billionaire Oleg Bakhmatyuk, 36, bought Townsends' North Carolina assets out of bankruptcy. Officials for the US shell corporation he created named Omtron hoped to turn a profit through cost-cutting and exporting dark meat, which brings higher prices outside the US. As a result, the company spent millions upgrading the NC facilities. But last week, Bakhmatyuk apparently decided to shut down operations and take his losses. In a letter to state officials, Omtron wrote the Mocksville and Siler plants will close by Oct. 4.
"He just didn't like the environment in this country and the lack of discipline that the poultry industry had," David Purtle, a former Tyson Foods executive hired to be Omtron's CEO, told the Raleigh newspaper, adding that he, too, was surprised by the move.
The company employs approximately 550 people at its Siler City operations, which includes two feed mills and a hatchery, and 476 people in Mocksville. That's in addition to the 145 people Omtron laid off in Siler City in May. At the time, the company said it was determined to make the operation competitive.
Approximately 200 of the Mocksville workers had been hired within the last three months.
Townsends has contracts with chicken farmers in Chatham, Moore, Randolph and Harnett counties. In May, Omtron boasted that maintaining those contracts meant a $35 million boost to the state's economy.
Farmers who had borrowed money to build chicken houses based on those contracts probably still owe between $250,000 and $400,000, said Dan Campeau, a poultry agent with the NC Cooperative Extension Service.
In February, Peco Foods Inc. announced it would acquire Townsends Inc.’s Arkansas division for $51.4 million. The US Bankruptcy Court for the District of Delaware issued its final approval for both transactions on Feb. 17. Peco Foods is an integrated poultry processor with operations in Alabama and Mississippi.