Chicken farmers sue owner of Townsends plants
Feb. 4, 2013
by Meat&Poultry Staff
RALEIGH, NC – More than 100 North Carolina chicken farmers are filing a breach of contract lawsuit against Omstron, a Ukranian company that bought Townsends, a bankrupt chicken processor, according to The Business Journal.
Omtron, which is owned by Ukrainian billionaire Oleg Bakhmatyuk, bought the North Carolina operations of Townsends out of bankruptcy in February 2011 and invested $10 million in plants in Siler City and Mocksville before announcing plans to close the plants. Surging feed prices, including corn, contributed to the Omtron's decision. The company was unable to cover production costs of production, the company said.
Bakhmatyuk planned to control costs by importing corn from Ukraine, where it was half the US price. But the Ukrainian government added export taxes on grain for the first time, cutting exports to unprecedented lows.
The farmers claim that inactivity at the Mocksville plant extended beyond the plant's workers to Randolph County, which is home to more than a third of 150 chicken farms that supplied Townsends, according to The Business Journal. The plants have been closed for more than a year, and many of the chicken farmers were stuck with debts incurred from building chicken houses in expectation of supplying the Townsends plants. The chicken suppliers are seeking damages for terminated contracts.