02/27/11 — Company: Chicken plant is delayed for year

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Company: Chicken plant is delayed for year

By Staff Reports
Published in News on February 27, 2011 1:50 AM

Wayne County Develop-ment Alliance officials have little to say about last week's announcement that Sander-son Farms is delaying by a year a decision on building a chicken processing plant in eastern North Carolina.

Wayne County was supposedly among the counties under consideration for the plant, but in recent months, the attention has been focused in Nash County, just north of the Wilson County line.

That location has generated heated opposition from people in both counties. However, Sanderson officials say the delay is because of the economy, not the opposition.

"It is my understanding that this is truly a decision based on financial concerns regarding corn and soy and has nothing to do with the on-going controversies in Nash and Wilson counties," Wayne Development Alliance president Joanna Thompson said in a prepared statement. "At this time, we have no indication one way or another where Wayne County might stand as far as a site consideration 12 months from now.

"In the meantime, the Development Alliance continues to move forward with multiple other projects that are considering Wayne County."

According to an Associated Press report, Sanderson Farms Inc. took a fiscal first-quarter loss Thursday, blaming lower chicken prices, slow demand from restaurants and higher feed prices.

For the three months ending Jan. 31, Sanderson Farms lost $33.6 million, or $1.52 per share, compared with a year-ago profit in the first quarter of $15.8 million, or 75 cents per share.

Revenue rose slightly to $427.7 million from $420.1 million. However, costs jumped to $436.6 million from $378 million. During the latest quarter, the company also took a $22.3 million charge to reduce the value of its live poultry inventory.

Sanderson Farms, which recently opened a new processing plant in Kinston that will employ 1,500 people, said it had decided to delay construction of a second plant in North Carolina.

"While the company's balance sheet is strong and it remains committed to the second North Carolina complex, the company believes it is prudent to be conservative with its working capital and balance sheet at this time," Sanderson Farms chief executive Joe F. Sanderson Jr. said.

Sanderson said he believed that 2011 would be a challenging year because of escalating grain prices, especially for corn, that are at near-record levels.