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State of Texas

Sanderson Farms Announces Site for New Poultry Complex in Texas

Sanderson Farms recently announced that sites located in Smith and Wood Counties, Texas have been tentatively selected for construction of a new poultry complex including a feed mill, hatchery, poultry processing plant and wastewater treatment facility. This announcement marks the company’s fourth expansion to the state of Texas with existing poultry facilities currently located in College Station, Waco and Palestine, Texas. Commencement of construction of the new complex is subject to completion of tax abatement and incentive agreements with public subdivisions and the state of Texas, as well as obtaining final required permits from appropriate agencies.

These new facilities will comprise a state-of-the-art poultry complex with the capacity to process 1.25 million birds per week for retail chill pack customers. At full capacity, the complex will employ approximately 1,700 people, will require 80 contract growers, and will be equipped to process and sell approximately 375 million pounds of dressed poultry meat annually at full production.

Sanderson Farms expects to invest approximately $200 million in the new Texas complex and anticipates that associated contract growers will invest an additional $135 million in poultry production facilities. The company expects to begin construction of the facilities during summer 2017, with initial operations of the new complex to begin during the first fiscal quarter of 2019.

According to Joe F. Sanderson, Jr., Chairman of the Board and Chief Executive Officer of Sanderson Farms, the selection of these sites followed a thorough due diligence process. “We are grateful for the cooperation from the economic development and governmental officials in Tyler, Mineola and Lindale, Texas; Wood and Smith Counties; and the state of Texas,” said Sanderson.

“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,” continued Sanderson. “The additional capacity of 1.25 million birds per week represented by the new complex will provide new marketing opportunities for the company for retail grocery customers. We are pleased that our recent financial performance has put us in a position to continue to grow our company.”

Since 1993, Sanderson Farms has built seven new poultry complexes, a record growth trajectory unparalleled by any other company in the poultry industry. With 11 existing processing plants, 10 hatcheries, eight feed mills, one prepared foods division and a new proposed poultry complex in Texas, the third largest poultry producer in the nation is poised to continue its tradition of prudent growth.

“It is not our intent to simply be larger,” said Sanderson. “Our vision is to be special, successful and at the very top of our industry. We are expanding in order to realize that vision. Our balance sheet is strong, we have eliminated our debt and we have sufficient capital to execute our growth strategy.”

By relying on organic growth, rather than acquisition, Sanderson Farms has positioned itself as a leader in its industry. “We will continue to identify ways to improve our operations and sales execution, as well as develop growth opportunities that strengthen the solid foundation that has supported our business for more than 70 years and continues to provide opportunities to reward our shareholders,” said Lampkin Butts, President and Chief Operating Officer for Sanderson Farms.

“We believe our success in this economic environment is due to our consistent ability to meet our primary objectives— achieve manageable growth with disciplined financial management,” continued Butts. “As such, we are proud to maintain a financial position that ranks among the strongest in our industry.”