Sanderson Farms, Inc. (NASDAQ: SAFM) announced today that its Board of Directors has approved plans to proceed with the construction and start-up of the Company’s Kinston, North Carolina, poultry complex. Sanderson Farms previously announced plans on April 24, 2008, to invest approximately $126.5 million for construction of a new feed mill, poultry processing plant and hatchery on separate sites in Kinston and Lenoir County, North Carolina. On June 26, 2008, the Company announced its decision to postpone the project due to market conditions and escalating grain prices. The budget for the project is now expected to be approximately $121.4 million.
The Kinston facilities will comprise a state-of-the-art poultry complex with the capacity to process 1.25 million birds per week for the retail chill pack market. At full capacity, the complex will employ approximately 1,500 people, will require 130 contract growers, and will be equipped to process and sell 6.7 million pounds per week of dressed poultry meat at full production. The Company expects to begin construction of the facilities later this summer, with initial operation of the new complex scheduled to begin during the first quarter of fiscal 2011.
According to Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc., “We are pleased that better overall market conditions, our financial performance and a strong balance sheet have put us in the position to continue to grow our Company. We are also proud to honor our commitment to the economic development and governmental officials in, and citizens of, the City of Kinston, Lenoir County and the State of North Carolina. 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. The additional capacity of 1.25 million birds per week represented by the new complex will provide new marketing opportunities for the Company in the fresh retail market. We look forward to working with the local communities in North Carolina that have graciously supported Sanderson Farms and this project.”
The Board of Directors also declared a regular quarterly cash dividend of $0.14 (fourteen cents) per share payable August 18, 2009 to shareholders of record on August 4, 2009.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. Its shares trade on the NASDAQ Stock Market under the symbol SAFM.
This press release contains forward-looking statements based on management's current views and assumptions. Actual results and events may differ. For a discussion of these matters, please refer to the "Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Performance" in Item 7 of the Company's 2008 Annual Report on Form 10-K and please refer to the cautionary statement found in Management's Discussion and Analysis of Financial Condition and Results of Operations under the heading "General" in Part I, Item 2 of the Quarterly Report on Form 10-Q for the Company's second quarter ended April 30, 2009.
Contacts:
Mike Cockrell, 601-649-4030
Treasurer
& Chief Financial Officer
