Official: Sanderson Farms to announce plant site
Dec 19, 2012 (Menafn - The Wilson Daily Times - McClatchy-Tribune Information Services via COMTEX) --Joe Sanderson Jr., chief executive officer of Sanderson Farms, told investors Tuesday during a quarterly report that company leaders anticipate being able to announce a new plant location soon.
The company's fourth quarter report follows a November announcement that company leaders decided to abandon plans to build a poultry processing plant in Nash County after considering a 145-acre site on N.C. 97 for two years.
"Despite the headwinds we have faced this year, I remain optimistic for the long-term," Sanderson said. "Our balance sheet is strong, we have significantly reduced our debt and the company is in a position to continue our growth strategy when market conditions allow.
"We hope to be in a position to announce the location of the next plant soon."
Sanderson did not say where the company's next plant would be but company leaders, in October, made an amendment to financial statements that lifted a geographical limitation on where Sanderson Farms could build its next plant.
Previously, Sanderson Farms was limited to building its next processing facility in North Carolina or Georgia. The amendment allows the company to locate anywhere in the United States, Sanderson said.
The company's newest plant in Kinston reached near full production capacity in the spring of 2012 and helped Sanderson Farms return to profitability for the year, Sanderson reported.
"While poultry markets improved compared to 2011, grain prices surged to record levels during August as a result of drought conditions across much of the corn belt," Sanderson said. "Our increased sales and return to profitability during the year reflect higher production as we completed the ramp up to near full production at our Kinston, North Carolina, facility."
The Kinston plant's production also helped to offset the company's 4 percent production cut at its other plants and the move helped to better balance production with customer demands.
Net income for the year ending on Oct. 31, totaled 53.9 million compared with a net loss of 127.1 million in 2011. Net sales for the fourth quarter of fiscal 2012 were 648.4 million compared with 559.8 million for the same period a year ago.
Net sales for fiscal 2012 were about 2.39 billion compared to 1.98 billion a year ago.
The company faced many of the same challenges in 2012 as it did in 2011, with reduced demand in the food service industry and more positive sales at the grocery store. Grain prices also remained high and are expected to remain volatile in the future. Sanderson said the company's overall financial strength, with reducing its debt in 2012, will help it continue toward future growth with the addition of another processing plant.
At the end of the 2012 fiscal year, Sanderson Farms had a balance sheet reflecting 896.5 million in assets, stockholders' equity of 550.1 million and net working capital of 262.2 million. The company's long-term debt stands at 150.2 million. Sanderson Farms will continue to keep production cuts in place during 2013.
The nation's fourth largest poultry producer was interested in building a large-scale production plant in Nash County, but the project was challenged by the city of Wilson, which launched lawsuits alleging rezoning flaws by county officials. Even though Nash County prevailed in Superior Court and the N.C. Court of Appeals, Sanderson officials were concerned that the legal battles would continue.
Sanderson officials weren't able to determine when the legal battles would end and decided to abandon plans to construct a 185,000-square-foot facility and employ 1,100 workers. Wilson leaders were concerned about any potential threat to its water resources.
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