Pilgrim's announces $190M expansion plan
Feb. 16, 2016
by Erica Shaffer
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Pilgrim's Pride announced a $190 million expansion.
GREELEY, Colo. – Pilgrim’s Pride Corp. announced a capital expenditure of $190 million that will target feed production, fresh chicken and prepared foods. The company said the strategic spending will enhance growth with key customers and expand production of its Pierce Chicken brand.
The project budget includes:
An $18 million investment at a case-ready plant to streamline deboning and packaging processes;
A $25 million investment at the company’s Moorefield, West Virginia, prepared foods facility to enhance existing fully cooked chicken lines and add an additional line to meet demands for the company’s Pierce Chicken brand;
A $35 million investment to acquire property and build a new feed mill in Nashville, Arkansas, to lower feed costs, enhance feed conversion and improve live poultry performance; and
A $20 million upgrade at the Pilgrim’s Mayfield, Kentucky, poultry complex to improve its value-added product mix. The project will result in the addition of approximately 150 new jobs in 2016. Pilgrim’s currently employs approximately 39,000 individuals.
|President and CEO Bill Lovette
“We believe one of our competitive advantages is the valued partnership we provide to key customers,” Bill Lovette, president and CEO, said in a statement. “Our cash flow reinvestment plan will present opportunities for our customers to accelerate sales, improve profitability and grow their businesses. Importantly, this effort redirects cash flow back into an area of core business strength in order to maximize return on capital and enhance shareholder value.”
Investments within the plan are not limited to the projects highlighted by Pilgrim’s. The company said the total $190 million cash flow reinvestment represents an amount greater than the company’s depreciation allowance, which demonstrates Pilgrim’s willingness to invest in the company’s future success.
“We are excited to have the opportunity to leverage our strong balance sheet to reinvest into our Company,” said Fabio Sandri, CFO of Pilgrim’s. “Our strategy remains to explore every opportunity at our disposal to grow our business and create shareholder value. Today’s announcement reinforces Pilgrim’s commitment to operational excellence, sustainable growth and margin creation.”
Pilgrim’s operates chicken processing plants in 12 states, Puerto Rico and Mexico with distribution through retailers and foodservice customers. Greeley, Colo.-based JBS USA Holdings Inc. holds a 75.3 percent controlling interest in Pilgrim’s Pride Corp.