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Sanderson plans to build Texas facilities with 1,700 jobs

By JACK WEATHERLY

Sanderson Farms Inc. plans to build a $200 million processing plant, feed mill and hatchery in Smith and Wood counties, Texas.

At full capacity, the facilities would employ 1,700 and process 1.25 million birds per week, the Laurel-based company said in a news release on Thursday.

Additionally, contract growers are expected to invest $135 million.

Operations are expected to commence in the first quarter of 2019, Sanderson said.

Sanderson is the third-largest poultry processor in the United States.

The plan is contingent on completion of tax abatement and incentives and permitting.

“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 stockholders,” Joe F. Sanderson Jr., chairman and chief executive, said in the release.

Sanderson shares closed at $94.72 on the NasdaqGS Friday, up 81 cents. The 52-week range of the shares is $74.07 to $99.40.

The company has 12 processing plants located around the South, including seven in Mississippi.

Sanderson has been targeted by antitrust lawsuits filed in two federal district courts.

Former contract chicken growers filed suit Jan. 27 in the U.S. District Court for the Eastern District of Oklahoma against Sanderson and other major processors, seeking damages for what they contend is price fixing that squeezed them out of their livelihood.

Sanderson and 13 other processors were sued along the same lines last fall in the U.S. District Court for the Northern District of Illinois.

In both cases, which are still pending, Sanderson contends it was not guilty of wrongdoing and vows it will fight the allegations vigorously.

Sanderson was successful in avoiding the avian flu outbreak that primarily struck processors in the Midwest in 2015 and resulted in the destruction of 50 million birds.

However, Tyson Foods, the nation’s largest poultry processor, reported that a particular strain of avian flu was discovered at a contract facility in Lincoln County, Tennessee, according to Reuters news service on March 6. As a result, 73,500 birds had to be destroyed.

Earlier this week, officials in Alabama just south of Lincoln County issued a ban on exhibiting or selling chickens as a precautionary move. No cases of the flu have been found in that area of Alabama, officials said.

Sanderson does not have any facilities in Tennessee or Alabama.

About Jack Weatherly

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