Planning For The Future
May 1, 2006
Planning For The Future
By Sam Gazdziak,
Not content to stand pat, many of the Top 125 members spent the year investing in expansion or acquisition.
From the multi-billion dollar behemoths in the front of the Top 125 to the companies in the back that managed “only” eight-figure sales marks, these companies generated some very impressive sales figures. But what did they end up doing with the millions and millions of dollars they made in sales? A great many of the Top 125 companies poured much of the profits right back into the business, ensuring a future filled with even more growth.
Some of the packers and processors on the list invested in new or upgraded facilities, and others grew their businesses by acquiring other companies.
A number of Top 125 companies made significant investments into their infrastructure. Whether it was building a new facility or expanding current ones, a great deal of dirt was moved in the name of meat-industry progress.
Smithfield Foods was one of the busiest companies, starting several expansion projects for subsidiaries Farmland Foods, Patrick Cudahy and John Morrell & Co. The total investment of $213.5 million was expected to create 679 jobs. The completion dates range from earlier this year into fall of 2007.
At Dennison, Iowa, the pork-processing facility of Farmland Foods added capacity to produce smoked sausage and hot dogs. Farmland also acquired and expanded a warehouse in Crete, Neb., which will serve as the western distribution for the company. Patrick Cudahy expanded its Golden Crisp Premium Foods facility in Sioux Center, Iowa, to accommodate three additional microwaveable bacon lines and a new wastewater treatment plant. John Morrell is expanding its pork processing facility in Sioux Falls, S.D., for additional capacity to produce ham, bacon and sausage products.
“Smithfield Foods’ major investments in our facilities in Denison, Sioux Center, Crete and Sioux Falls underscore our confidence in the local workforce to meet the needs of our customers and illustrate our commitment to enhancing our presence in each community,” said Larry Pope, Smithfield’s president and chief operating officer.
Among the other Top 125 companies, Perdue Inc. expanded its Monterey, Tenn., further-processing plant, creating 400 new jobs. The expansion increased the company’s ability to produce sliced, deli-style meats primarily for foodservice operators. The company also announced major expansion plans for its Perry, Ga., processing complex. Perdue will add a cooking plant and double the capacity of the existing processing plant, as well as build a distribution center. Combined with an upgrade to its Monroe feed mill and hatchery, a total of 1,000 new jobs will be created in Georgia.
Earlier this year, Gold’n Plump Poultry announced plans to update and expand its production complex and current operations in Arcadia, Wis. The $38 million expansion will increase production capacity by 31 percent and will include a larger state-of-the-art hatchery.
Elsewhere on the Top 125 list, Swift & Co. opened a new research and development center, and Willow Brook Foods opened a new slicing facility. Cooper Farms added 35,000 square feet to its plant for value-added processing and refrigeration, and John Soules Foods will open a new 130,000-square-foot facility this May for fully cooked processing and extra freezer space. Sara Lee Corp. and Milton Abeles Inc. both moved into new headquarters, in Downers Grove, Ill., and Port Washington, N.Y., respectively.
Other companies may not have broken new ground, but they still modernized and improved their operations with new technology. Farmers Pride Inc., for example, started its new air-chilling process in March 2005. “Our new Bell & Evans air-chilling process is a state-of-the-art facility unlike any other plant in North America,” says Scott Sechler, president. He added that he had visited many air-chill plants and incorporated the best features into his facility.
While some meat and poultry processors focused on expansion, others focused on acquisition. As a result, some names from last year’s Top 125 list are gone from this year’s report. Rosen’s Diversified Inc., which was 17 on the 2005 report, merged with American Foods Group. Norbest (83) recently merged with West Liberty Foods. Colorado Boxed Beef (28) sold its processing operations to Buckhead Beef, a SYSCO subsidiary, and became solely a distributor. SYSCO also acquired Facciola Meat Co. (109) in May of 2005, as well as Desert Meats this February.
Pork processor Seaboard Foods acquired Daily’s, a bacon processor, last year and started up a new processed meats division. Seaboard is one of the newest additions to the Top 125’s billion-dollar club, and that addition is sure to help the company move even higher.
Cargill spent the fiscal year making several acquisitions. In April 2005, Cargill Ltd. purchased the beef-processing and related assets operated by Better Beef Ltd., one of Canada’s leading beef processors. The deal was made to enhance product and service offerings for food customers and producers in Canada and around the world.
More recently, Cargill acquired Beef Packers Inc., Fresno Meat Co., RPM Beef Inc. and King-O-Meat Inc., combining the companies under Beef Packers Inc. The new company will help Cargill further build its presence on the West Coast, creating new opportunities for customers and cattle producers. NP