US: Sanderson Farms sinks $200m in feed, poultry production facility

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Sanderson Farms is set to invest $200m in a new feed and poultry processing complex in Texas, to bolster regional retail production, says executive. 

The new complex will be located in Smith and Wood counties in Texas, and, when complet, will include a feed mill, a poultry processing plant, hatchery and, also, a wastewater treatment facility.

The feed mill is planned to be built on a site in Wood County, said Bob “Pic” Billingsley, director of development and engineering for Sanderson Farms. The company is currently in the process of completing its due diligence on the location.  

“We were looking for a good contract producer base in a four or five country area, and that Wood County site gives us a close location to where the contract producers would be,” he told us. “And Union Pacific [Railroad] has a mainline rail through Wood County in close proximity.”

The complex would be the fourth that the company has in that state and is intended to support poultry production for retail chains in Texas and throughout the western US.

Regional feed supply

Feed generated at the proposed facility would be for internal use, said Billingsley. “The feed mill will be a regional feed mill for just that area,” he added.

“We’ve already got two [feed mills] in Texas,” he said. “This will be a regional feed mill for those contract producers.”

When at full capacity, the site is expected to generate about 8,200 tons of feed a week, he said.

“Our plan is to be under construction this summer on the feed mill, with startup to begin in the latter part of 2018 [for] the feed mill,” he said. “And to have the whole complex all be in operation in January of 2019.”

Whole project elements

The overall project, when completed, is expected to employ about 1,700 people, with 80 contract growers, said the company. It will feed and process about 375m pounds of poultry meal annually when brought up to full production.

“We believe this expansion will enhance our ability to drive revenues and earnings and allow us to continue our record of building long-term value for our shareholders,” said Joe Sanderson Jr, chairman and CEO of Sanderson Farm. “The additional capacity of 1.25m birds per week represented by the new complex will provide new marketing opportunities for the company for retail grocery customers. We are pleased that our recent financial performance has put us in a position to continue to grow our company.”

However, along with due diligence work on some of the intended facility locations, the project is waiting for the completion of tax abatement and incentive agreements with the state of Texas and public subdivisions, the company said. Final regulatory permits from different agencies are also in process.

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