Pilgrim’s creates 150 jobs

By Oscar Rousseau

- Last updated on GMT

CFO Fabio Sandri: "We are excited to have the opportunity to reinvest"
CFO Fabio Sandri: "We are excited to have the opportunity to reinvest"

Related tags: Investment, Capital accumulation, Poultry

US-based poultry company Pilgrim’s Pride has announced a $190m strategic capital investment plan for growth and brand expansion, leading to the creation of 150 jobs. 

The investment will see Pilgrim’s build a feed mill in Nashville, pump $18m into a deboning and packaging facility and, among other improvements, add new cooked chicken factory lines to factories to keep pace with growing demand.

Pilgrim’s announced the $190m fund on Tuesday 16 February, saying the investment would also be used to enhance its Pierce Chicken brand, a supplier of fresh and frozen poultry.

We believe one of our competitive advantages is the valued partnership we provide to key customers,​” said Bill Lovette, president and CEO of Pilgrim’s Pride Corporation. “Our cash flow reinvestment plan will present opportunities for our customers to accelerate sales, improve profitability and grow their businesses. Importantly, this effort redirects cash flow back into an area of core business strength in order to maximise return on capital and enhance shareholder value.​”

‘Excited’ Pilgrim’s

This announcement comes several days after Pilgrim’s Pride reported that strong headwinds in the poultry export market​ hurt its annual trading profits in 2015.

In the report, Pilgrim’s confirmed it would spend $185m in “operational improvements​”. This is a separate investment to the $190m confirmed in the capital investment plan.

On the investment plan, Pilgrim Pride’s CFO Fabio Sandri said the $190m reinvestment was an amount greater than the Pilgrim Pride’s depreciation allowance.

We are excited to have the opportunity to leverage our strong balance sheet to reinvest into our company,​” said Sandri. “Our strategy remains to explore every opportunity at our disposal to grow our business and create shareholder value. Today’s announcement reinforces Pilgrim’s commitment to operational excellence, sustainable growth and margin creation.​”
 

Investment breakdown: where will Pilgrim’s money go?

• $18m spent on Pilgrim’s case ready facility to streamline deboning and packaging
• A $25m investment at the Pilgrim’s West Virginia prepared foods facility to enhance existing fully cooked chicken lines and add an additional line to meet growth demands.
• $35m to acquire property and construct a new feed mill in Nashville, Arkansas, to lower feed costs and enhance feed conversion
• A $20m fund at the Kentucky complex to re-engineer the facility to improve its value-added product mix

Related topics: Meat

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