Sanderson to build poultry complex in Texas

by Meat&Poultry Staff
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PALESTINE, Texas – Laurel, Miss.-based Sanderson Farms, Inc. announced plans to invest more than $100 million on a new big-bird deboning poultry complex in and near Palestine, Texas. The project was revealed Feb. 14 during the company’s annual stockholders meeting at the its headquarters.

“The state of Texas has been an outstanding place for Sanderson Farms to do business,” said Joe F. Sanderson, Jr., chairman and CEO. “We look forward to the new marketing opportunities the new facility will create for us in this important region.

“However, construction of the new facility remains on hold until we have better visibility on future prices and availability of grain, and is subject to other contingencies including obtaining necessary permits, negotiating construction contracts, completing construction and obtaining board approval to move forward with the project.”

Three facilities are planned, according to the Palestine Economic Development Council. A hatchery and processing plant will be built in Anderson County at a cost of $92 million; a feed mill will be located in Freestone County at an additional $32 million. The company expects to employ up to 1,000 people once the plant is open and fully operational.

”This project is a long-term capital investment and will be the third complex of this nature built in Texas,” said Wendy Ellis, economic development director for the City of Palestine Economic Development Corporation. “Sanderson Farms has a reputation for being an outstanding corporate partner wherever they are located. The leadership in Waco and McLennan County has enjoyed an outstanding relationship with them and has seen positive impacts in their area from the complex that was built there.

“Along with the relationship with Sanderson Farms, we look forward to putting together a collaborative effort with our neighbors in Freestone County to provide what the company needs to build in this area,” she added.

Sanderson Farms said the new complex will complement the company's existing operations in Bryan and Waco, Texas.

Sanderson told stockholders that fiscal 2012 was another challenging year for the company and the poultry industry. He said the economic environment and rising feed costs continued to challenge Sanderson Farms, despite record production and sales, significant debt reduction and a return to profitability.

“Over the past fiscal year, our revenues reached a new record of $2.4 billion, a 20.6 percent increase compared with the previous record set in fiscal 2011 of just under $2.0 billion,” Sanderson said. “This revenue growth was driven by improved market prices for our poultry products, higher volumes due to our new Kinston, NC plant reaching near full production, and steady consumer demand for our products at the retail grocery store level.

“We processed a record 2.9 billion pounds of dressed poultry in fiscal 2012 compared with 2.8 billion pounds during fiscal 2011,” he added.

Sanderson expressed cautious optimism that a national economic recovery is gaining traction, although the prospect of higher grain costs is still ahead.

“We also do not expect to see a meaningful improvement in demand from our food service customers until the national employment situation improves and consumers begin to dine out again on a consistent basis,” Sanderson added. “While we acknowledge these more immediate challenges, we will continue to manage Sanderson Farms for the long term. This strategy has historically served us well throughout the cycles that characterize our industry. With a strong financial position, we will execute this same strategy in fiscal 2013."

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