Pilgrim’s Pride to consolidate, expand in South

Pilgrim’s Pride Corp. (Nasdaq: PPC) said Tuesday it will consolidate operations from a processing plant in Boaz, Ala., at facilities it plans to expand in Russellville, Ala., and Douglas, Ga.

The consolidation is part of an overall goal to save $200 million in 2014. In January, Pilgrim’s will expand its operations in Russellville and Douglas, absorbing its processing operations in Boaz. The consolidation will allow the company to maintain current production levels, increase efficiency and improve its margins by more than $20 million.

Additionally, the company will invest approximately $10 million to upgrade a feed mill in Falkville, Ala., while adding about 100 jobs at the Douglas and Russellville operations.

“Given our decision to consolidate operations, our intent is to offer retention incentives to encourage many of our Boaz team members to remain with the company in different capacities,” Pilgrim’s CEO Bill Lovette said in a statement.

Purchased by Pilgrim’s in 2007, Boaz is the company’s smallest operation in terms of processing capacity and employs about 1,100 people. Many Boaz employees will be offered opportunities at other nearby Pilgrim’s operations and all employees will be offered retention incentives, though its not known how many people might accept those incentives, spokesman Cameron Bruett said.

The company anticipates that contract chicken growers who currently supply the Boaz operation will have an opportunity to meet the enhanced supply needs of Pilgrim’s operations in Russellville and Douglas.

Pilgrim’s also said that it will invest about $25 million to expand a facility in Mt. Pleasant, Texas. The company previously announced an investment of $25 million to upgrade its feed mill and processing operations in Enterprise, Ala.

The moves will allow Pilgrim’s to optimize its operational network and efficiently deploy resources and capital to facilities with improved infrastructure, greater scale and more favorable opportunities for long-term profitability, the company said.

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