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Record-high feed costs and soaring gasoline prices have recently made an already difficult situation worse for processors and most are no longer shy about passing the higher input costs through to their customers. Over the past two months, evidence of the market challenges have been apparent in the flat or slumping financial results of companies such as Tyson Foods, Sanderson Farms and Pilgrim’s Pride.
But not unlike the darkness before the dawn, leave it to a company like Sara Lee Corp. to deliver a positive ray of hope. It did just that earlier this month with the opening of its 200,000-sq.-ft. slicing facility in Kansas City, Kan. Obviously, the project was on the radar of anyone following the industry, as plans for the $140 million extreme makeover of the former Armour-Eckrich Branded Meats plant were announced in 2009. The brownfield project was worth the wait and as timely as the would-be signing of a Cy Young-quality pitcher before the Royals 2011 opening day game, which never happened.
While the plant had been operating on a limited basis for the past several months, the company ceremonially opened the facility to visitors June 3. It was an honor to be among that day’s visitors, alongside local and national media sources, the city’s economic developers and local elected officials. The fact that the company’s top executives, including CJ Fraleigh, CEO of Sara Lee North America and Marcel Smits, Sara Lee Corp. CEO, were on hand and guests that included Kansas Gov. Sam Brownback, spoke volumes about the significance of the addition of the company’s eleventh meat plant and its biggest single capital expenditure in the past several years.
Within the 25-year-old shell, visitors walked through what appears to be nothing short of a brand-new plant from the inside, where a “touch-free” themed design features a wide variety of robotic and automated technologies requiring less than half the employees needed for more traditional operations of its capacity. It was more than a little refreshing to shuffle through a spotless, technology-oozing plant and see the array of newly purchased equipment from stalwart suppliers like Handtmann, Cozzini, Polar and Weber. From inside a giant tent in the parking lot, cameras flashed, Sara Lee products were proudly served and handshakes and smiles were ubiquitous. That day’s event revived an optimistic buzz that can only be created by the introduction of a new plant to the meat-processing industry, indeed a novel event in the face of the recent recession. I hadn’t been a part of new plant tour of this scale since 2005, before the opening of the Triumph Foods plant in St. Joseph, Mo.; or on a smaller scale, at the ribbon-cutting of what was then, the Gold Kist plant expansion in Live Oak, Fla. in 2006.
With plans of utilizing the Kansas City, Kan. plant to produce more than half of its lunch meat and a goal of pushing its Hillshire Farm brand to its next billion-dollar brand, I am hopeful that this ribbon cutting signals a positive shifting of the tides for the future of the industry’s processors despite some additional challenges that are forecast to be coming down the pike.
Now all I need is the smallest sign of mid-season hope from my beloved Royals. I won’t be holding my breath.
