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The nation's fourth largest poultry processing company made the announcement last summer that its fast track plan for a new plan in Kinston was indefinitely delayed after corn prices soared to record highs. Sanderson uses corn for animal feed in its production process.
Corn prices have dropped substantially since last year. Sanderson returned to profitability during the second fiscal quarter in 2009, which ended April 30.
However, the company's plans to begin new plant construction in Kinston remain on hold.
"Nothing has changed," Sanderson Farms Director of Development and Engineering Bob Billingsley said. "We still have some debt incurred from last year during tough times."
Billingsley said Sanderson is still committed to its Kinston plan.
"Our commitment is still strong," Billingsley said. "The property at the site is in our name and the engineering for the plant is complete."
As with Billingsley, Lenoir County Economic Development Director Mark Pope said Sanderson is definitely coming to Kinston.
"Things keep going in the right direction," Pope said. "The cost of feed keeps dropping."
Sanderson officials announced last spring they planned to build a processing plant, feed mill, and hatchery in Kinston. The company's total investment at the site will be $126.5 million.
Officials planned to have the plant's construction completed within 15 months of the initial announcement.
When floods devastated the Midwest last spring and summer and corn prices skyrocketed, Sanderson decided to delay the project. Profits for Sanderson continued to slump in 2008 and into early 2009.
"It's hard to predict profit," Billingsley said. "We are still evaluating our balance sheet, which will drive our decision when to pull the trigger and begin construction in Kinston."
Billingsley said when Sanderson officials make the decision to move ahead with the project, the plant's construction will be completed in about a year.
"We would begin the hiring process at the 10-month mark," Billingsley said.
The processing plant will require 1,400 employees to operate. Sanderson will partner with local farmers to house and care for the chickens. Each independent contract producer will invest in the facilities used to care for the chickens.
With the delay, Pope said the incentive agreements offered to Sanderson from Kinston and Lenoir County will likely be amended to allow the company to meet its employment targets for a specified period.
"The dates will be moved on the agreement," Pope said.
Officials will continue to watch Sanderson's balance sheet in the coming months. Pope said the company will continue to make conservative decisions based on economic conditions.
Sanderson's net income for fiscal quarter 2009 was $26.2 million. The net income for the company during the first six months of 2009 was $19.5 million.
"We are pleased to report a return to profitability for Sanderson Farms during the second fiscal quarter of 2009," Sanderson Farms CEO Joe Sanderson Jr. said. "Much of the market improvement is due to production cuts and resulting reduced supply of chicken in the market."
Chris Lavender can be reached at (252) 559-1078 or clavender@freedomenc.com.
Sanderson Farms construction plans
- Construction plans in Kinston still delayed
- It's been a year since company announced delay for local plant construction
- After several quarterly losses, company beginning to return profit again
- $126.7 million investment will bring 1,400 new jobs to region
- Once construction begins, plant will be completed within 15 months
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