Sanderson Farms, the third largest broiler company in the United States, has largely reached its current size through the construction of new poultry complexes, rather than by acquiring existing poultry plants from other processors.
It is a strategy that has served Sanderson Farms well, although the company’s CEO says it is never an easy process.
“We’ve built seven complexes since the beginning of 1992, and we’re breaking ground on another one this month in Texas, and that will not be the last one we build,” Joe F. Sanderson Jr., chairman and CEO of Sanderson Farms, said on September 5 while speaking at the Barclays Global Consumer Staples Conference.
“It’s a rigorous job to do that, and to locate it and to find a place. We check off 50 boxes-plus to do that,” he added.
The Texas plant Sanderson mentioned will be part of a complex to be located in the counties of Smith and Wood. It will include a new poultry processing plant, a feed mill, hatchery and wastewater treatment facility. The plant will have the capacity to process 1.25 million birds per week for retail chill pack customers.
Site selection not an easy process
The last complex Sanderson Farms built prior to the announcement of the future plant in Texas was located in St. Pauls, North Carolina. That site was chosen after another potential site, in Cumberland County, North Carolina, decided against offering Sanderson Farms an incentive package to locate there.
Before building in St. Pauls, Sanderson Farms’ newest plant was constructed in Palestine, Texas. But the company chose that site after plans to build in Nash County, North Carolina fell through.
Continuing the strategy of building new plants
Sanderson Farms persevered through those roadblocks and as a result, has increased its production and shareholder value has been high.
“We think our growth strategy has been the best way for us to add value for our shareholders, and that strategy has worked,” said Mike Cockrell, Sanderson Farms chief financial officer. “We may run out of luck one day, but it’s worked for it and we’re going to continue the same strategy.”
