Despite an often bleak economic picture, meat and poultry processors continue to upgrade existing facilities, and in some cases, build new ones.

Consolidation and a still-sluggish economy have been largely to blame for slowed capital spending – and in some cases, facility closures – in the food industry during the past year.

Among major announcements, industry giant Kraft Foods, Northfield, IL, announced earlier this year plans to close 20 of its production facilities worldwide, cutting 6,000 jobs from its payroll over the next three years as part of its Sustainable Growth Plan, expected to deliver consistent, long-term growth in volume, revenue, and earnings. Pittsburg, TX-based Pilgrim’s Pride Corp., meanwhile, announced plans to restructure its turkey operations and sell or close its Hinton, VA, plant employing 1,300 people and processing about 160,000 turkeys per week, while Springdale, AR-based Tyson Foods Inc. said it will shut down a Jackson, MS, poultry plant to consolidate operations at its newer Carthage facility, costing 800 workers their jobs.

“This was an extremely difficult decision, largely because it involves team members, many of whom have been with the company a long time, and a great community that has always been supportive of our industry,” observes Bill Lovette, group vice president of food service, Tyson Foods. “In the long run, this decision will help us improve the return on invested capital for the chicken segment of our business.”

But despite plant closures for the sake of restructuring, other industry growth efforts call for new plants or the retooling of existing facilities. “Industrial buildings are never finished,” notes nationwide construction management and project services firm Hanscomb Faithful & Gould’s “Hanscomb-Means Report,” Spring 2004. “The rapidity of technical change means changes and expansions are continually needed. Shorter product life cycles and changing manufacturing processes increase the need for facility flexibility and expandability.

“Demand for new buildings remains low. However, there is a market for projects that enhance competitiveness like improving the energy efficiency of the manufacturing building and its operations and introducing new manufacturing processes that increase efficiency – speed, changeover time, and waste reduction.”

On the new plant front, Triumph Foods, formerly known as Premium Pork Allied Producers, began construction of a $140-million, producer-owned plant in St. Joseph, MO, early this year. The 630,000-square-foot facility, scheduled to begin operating in the summer or fall of 2005, will start with 400 to 500 employees and expand to about 1,000 within two years, in hog slaughtering, processing, and administrative positions.

Laurel, MS-based Sanderson Farms this month also announced it has chosen two Georgia locations for a $96 million project including construction of a new feed mill, hatchery, processing plant, and wastewater treatment plant, all expected to create up to 1,700 jobs. Construction will begin this summer, with the facilities expected to open in late 2005.

“We believe our expansion into the state of Georgia offers a unique opportunity to begin the next phase of growth for Sanderson Farms,” notes Joe Sanderson Jr., president and chief executive officer of Sanderson Farms. “The location of this new state-of-the-art poultry complex will put us closer to our growing list of customers. More importantly, we believe this expansion will enhance our ability to drive revenues and earnings, and allow us to continue our record of building value for our shareholders.”Among those companies expanding existing facilities, Indiana Packers Corp., Delphi, IN, is planning a $70-million expansion to its meat cooler and production capacity that will add 269 jobs over the next two years to its 1,400-employee workforce. Patrick Cudahy Inc., Cudahy, WI, meanwhile, at 116 years old is adding onto its distribution center as part of a seven-year, $110-million expansion for growth plan. Expected to be operating by the fall of 2004, the new facility will be 27,000 total square feet and provide room for logistical plant support as well as other needs.

“Patrick Cudahy has been committed to the community in which we serve and people have trusted the Patrick Cudahy name for over a century,” says Roger Kapella, chief executive officer and president of Patrick Cudahy. “We’re pleased to mark our anniversary with vital growth plans; keeping jobs in Wisconsin.”

Beyond processing plant and warehouse/distribution center growth, processors are augmenting their operations with revamped or new offices, headquarters, R& D facilities, and other locations. While Greater Omaha Packing, Omaha, NE, is planning a new $1 million to $2 million training facility at its company headquarters, for example, Tyson Foods in April announced plans for its new $40-million Discovery Center, a 184,000-square-foot research and development/training facility that will be built on the campus of the company’s corporate headquarters in Springdale. The facility will house Tyson’s research and development team, corporate management training staff, and the company’s corporate marketing group. Preparation on the 16-acre site has already begun, and the project is expected to be completed in late 2005. Among other features, the Discovery Center will include: 20 product development kitchens, including a Retail Presentation Kitchen, a Food Service Preparation Kitchen, and a “Kitchen of the Future”; flexible facilities for leadership, management, and job-functional training for team members; a USDA-inspected Pilot Plant, which will provide a manufacturingenvironment for new concepts to improve “speed to market”; a consumer focus group area; a proprietary sensory testing lab; and facilities for packaging design and development testing.

“One of the Tyson Foods Core Values states that we will invest in our people, products, and processes,” says John Tyson, chairman and chief executive officer of Tyson Foods. “This facility does exactly that. It will allow us to move toward our goal of an ever-increasing array of value-added products, and to identify and rigorously develop high-potential talent throughout the company.”

NEW DISTRIBUTION CENTERS
Company	Location	Product	Investment (US $millions)	Completion*
Moyer Packing	Souderton, PA	Meat	N.A.	Spring 2004
Packerland Packing	Green Bay, WI	Meat	N.A.	Summer 2004
Koch Foods LLC	Morton, MS	Meat and poultry	N.A.	Fall 2004
Source: Project data from industry sources, news releases, and The National Provisioner’s Annual Plant Design & Construction Survey Note: Project details, completion dates subject to change
NEW MEAT & POULTRY PLANTS
Company	Location	Product	Investment (US $millions)	Completion*
ConAgra Foods	Quincy, MI	Kosher meats	N.A.	Fall 2004
Ridgefield Farms	Huron, SD	Beef	27	N.A.
Triumph Foods LLC	St. Joseph, MO	Meat	140	Summer or fall 2005
Chiappetti Lamb & Veal Company	Chicago, IL	Lamb and veal	8+	November 2005
Wotiz Meat Company	NY metro area	Beef, lamb, veal,pork, and poultry Portioned meat	N.A.	Summer 2005
Sanderson Farms	Near Moultrie, GA	Poultry	96	Late 2005
Hormel Foods	Albert Lea, MN	Pork	N.A.	N.A.
Wegmans Food Markets	Chili, NY	Meat	40	Fall 2006
Dakota Turkey Growers	Huron, SD	Turkey	45	Late 2005
Mississippi Beef Processing	Oakland, MS	Beef	N.A.	June 2004
Elite Foods	Anson County (near Morven), NC	Antibiotic-free chicken	9	N.A.
Koch Foods LLC	Morristown, TN	Chicken de-boning	9	Early 2005
Campbell County Family Meats	Herreid, SD	Meat	N.A.	N.A.
Source: Project data from industry sources, news releases, and The National Provisioner’s Annual Plant Design & Construction Survey Note: Project details, completion dates subject to change
EXPANSIONS & RENOVATIONS
Company	Location	Project	Investment (US $millions)	Completion*
Allen Family Foods Inc.	Harbeson, DE	44,000-square-foot expansion/6,000 square-foot renovation	20	N.A.
Bridgewater Quality Meats	Bridgewater, SD	Additional refrigeration	N.A.	November 2004
Tyson Foods	Dakota City, NE	84,500-square-foot beef processing addition	N.A.	Fall 2005
Tyson Foods	Storm Lake, IA	Pork plant addition	N.A.	October 2004
Wisconsin River Brands Inc. coolers/processing room	Manston, WI	Slaughter floor/	N.A.	October 2004
Pioneer Snacks	Mankato, MN	30,000 square-foot	3-4	October 2004processing addition
Patrick Cudahy Inc.	Cudahy, WI	27,000-square-foot distribution center addition	3.2 (part of a seven-year, $110 million expansion)	Fall 2004
Gusto Packing Company	Montgomery, IL	60,000-square-foot plant and capacity addition	6	August 2004
Holten Meat Inc.	Sauget, IL	60,000-square-foot freezer/processing/dry storage expansion	10	December 2004
Kunzler Co.	Tyrone, PA	Bacon plant addition	4.7	April 2004
Plumrose USA Inc.	Council Bluffs, NE	45,000-square-foot plant expansion	14	May or June 2004
Ruiz Foods	Dinuba, CA	50,000 to 100,000-square-foot processing plant expansion	N.A.	Spring 2005
Indiana Packers Corp.	Delphi, IN	160,000-square-foot pork packing plant expansion	70	N.A.
Source: Project data from industry sources, news releases, and The National Provisioner’s Annual Plant Design & Construction Survey Note: Project details, completion dates subject to change