Firms restart poultry plants

Buoyed by the increasing profitability of the poultry industry, new buyers are giving shuttered facilities across Arkansas a second look.

Marvin Childers, president of the Poultry Federation, said cheap feed, high beef prices and disease issues in the pork industry have led to a "bubble of opportunity" for poultry companies.

"Grain prices are down," he said. "And when grain prices are down, you've got poultry companies willing and able to invest and seize on these opportunities."

Small poultry companies are expanding in light of favorable business conditions. New operations in old facilities employ more than 500 people in Arkansas, but economic development leaders say that number could grow by another 300 if purchases and planned expansions pan out.

"If grain prices continue to stay where they are, I think you'll see companies making more investments," Childers said.

At the beginning of October, Hillstern Farms reopened the former Petit Jean Poultry plant in Arkadelphia. That facility closed in April 2011, leaving 385 without work.

"It was one of those closures that was emotional for the community," said Stephen Bell, chief executive of the Arkadelphia Regional Economic Development Alliance and Area Chamber of Commerce. "We're just really excited that it's back open."

Bell said the facility now employs about 40, but the company expects to expand to 170.

Hillstern Farms did not respond to multiple requests for comment.

Bell said the company grows smaller birds and doesn't remove the heads and feet during processing. The birds usually end up in California and serve an Asian market.

"We're not really competing with a large company like Tyson," Bell said. "It's sort of a niche market, which we think is an advantage."

Rogers-based Ozark Mountain Poultry, which employs about 1,200 people, also has expanded its business by moving into old facilities.

In October 2013, the company bought Pilgrim's Pride's Batesville facility, reopening it two weeks after it had closed, restoring about 250 jobs.

A year later, the company started leasing the former H&L Poultry facility in Warren and now employs about 225 people. The H&L facility had employed about 270 until it was shuttered about four years ago.

At the opening ceremony, Ed Fryar, chief executive of Ozark Mountain Poultry, said the biggest challenge was getting the facility up to code.

"The first time I saw this plant just a couple of months ago, the ammonia system, the refrigeration system, was in the worst shape of any refrigeration system I've ever seen in any plant anywhere," he said.

Both companies are small compared to Tyson Foods, which employs 23,000 in Arkansas, but the reopened facilities have provided a boost to the affected communities -- and benefited the companies as well, said Scott Hardin, spokesman for the Arkansas Economic Development Commission.

"When a company is considering purchasing a recently closed poultry facility, the company knows there is a trained, available workforce in place," he said. "This definitely factors into a company's decision."

Hardin said both companies qualified for state incentives.

Investments by smaller companies come as Alabama-based Peco Foods continues to build its $165 million operation in Pocahontas and Corning -- the first new construction in the poultry industry in 20 years, Childers said.

And companies across the nation are entering an expansion period after several tough years, said Tom Super, spokesman for the National Chicken Council.

"Companies are investing in infrastructure," he said. "Why that's happening is certainly the demand for chicken coupled with the feed prices moderating to a reasonable level."

Though the poultry industry's prospects have improved, not all companies have been successful in reopening old facilities.

In late 2013, Summit Poultry reopened the former Horizon Foods facility in Pine Bluff, but operations ceased in May, said Lou Ann Nisbett, president and chief executive of the Economic Development Alliance for Jefferson County.

Nisbett said Summit's leadership thought they were going to be bought by a larger firm, but the deal didn't go through. Because of the anticipated purchase, Summit had not ordered more birds and had nothing to process.

"They thought somebody bigger was coming in," Nisbett said. "It was disappointing -- very disappointing."

Before Summit, Horizon Foods occupied the building, but that company only lasted one year. Tyson Foods built the facility in 1957 and closed it in 2003.

The facility's equipment is intact and Nisbett said she is optimistic a firm will continue the business where Summit and Horizon left off.

"We never give up here," she said. "We continue to market and we hope other groups will have interest."

Besides the Pine Bluff facility, Hardin said he knew of three vacant poultry plants.

The former Petit Jean facility in Danville, which had employed 800 until 2009, and the former Pilgrim's Pride facilities in Clinton and El Dorado, which had employed more than 1,100 until operations ceased in 2008 and 2009, are still empty.

Clinton Mayor Roger Rorie said the Van Buren County facility is a tough sell. Pilgrim's Pride cut gaping holes in the building's roof to get equipment out.

"They've done us the worst that they could do," he said. "They took all the refrigeration. They took everything of value except the walls."

Pilgrim's Pride could not be reached for comment.

Natural gas drilling has helped Clinton in recent years, but Rorie said that won't last forever. He'd like to see the plant used again.

He said one poultry company has asked about the building in the past year.

"We've had a little bit of interest," he said. "But nothing concrete."