Source:  Tom Johnston, MEATINGPLACE.COM, 3/30/10

Sanderson Farms Inc. said Monday it is seeking to build a new poultry complex near Goldsboro, N.C.

The Laurel, Miss.-based company said in a news release it would invest some $94 million in the new big-bird deboning complex, a consideration first mentioned late last year  Construction is expected to begin in the second quarter of fiscal 2011 and operations are expected to begin in the third quarter of 2012, the company said.

The project is subject to various contingencies. If completed, it would consist of an expansion of the feed mill for the company's Kinston, N.C., complex. Construction of the Kinston complex, which will process 1.25 million birds a week and employ 1,100 people, already is underway.

"This planned expansion in North Carolina will support our growth strategy and further enhance our ability to drive revenue and earnings for our shareholders," said Joe Sanderson, Jr., chairman and CEO.

Sanderson said both North Carolina facilities would represent a 30 percent increase to the company's processing capacity and should provide steady production growth through 2014.

Paying for it

Simultaneously, Sanderson Farms announced a public offering of 2 million common shares, proceeds of which will be used with other funds to finance the construction of the Kinston, N.C., complex and the potential new plant in Goldsboro, N.C.

The proceeds may also be used to reduce debt and invest in cash and cash equivalents. Some of the invested proceeds may be used as working capital and for general corporate purposes, the company said.

Sanderson plans to grant underwriters a 30-day option to buy up to an additional 300,000 shares of common stock to cover over-allotments. Morgan Stanley and J.P. Morgan are the joint bookrunning managers, and BMO Capital Markets and Stephens Inc. are co-managers.

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