Premium Standard Farms, Inc. Board Approves Milan Plant Expansion
January 03 2006 - 9:39AM
PR Newswire (US)
Improvements Will Increase Company Processing Capacity by 15% and
Plant Capacity by 35% KANSAS CITY, Mo., Jan. 3
/PRNewswire-FirstCall/ -- Premium Standard Farms, Inc. (PSF)
(NASDAQ:PORK) announced today that its board of directors has
approved the expansion of the company's Milan, Missouri hog
processing plant. Based on the results from the recently completed
engineering and feasibility study, the improvements will increase
processing levels to 10,000 head per day versus the current level
of 7,400 head per day. This translates into 15% of additional total
company processing capacity, or an additional 35% capacity to the
Milan plant. The expansion project will increase PSF's capital
investments by approximately $23 million, and the planned ramp up
of capacity will begin in the second quarter of calendar year 2007.
John Meyer, CEO of Premium Standard Farms, said, "The decision to
expand our Milan plant is a critical component to our growth
strategy. Our integrated system satisfies the needs of our
discriminating customers by providing consistent, high quality pork
products. This investment will allow us to meet increasing
international and domestic demand for our products as we continue
to further enhance our export business and expand our domestic
customer base." The company will acquire the additional hogs
necessary to expand the processing levels at the Milan plant from
three sources: * PSF's Missouri farms, which have experienced
increased productivity from the existing sow base. * Outside
producers that would become part of PSF's Processed Verified
Program. This is based on a successful model that was instituted at
the company's North Carolina plant, which currently obtains
approximately 25% of its head from other Processed Verified
suppliers. * The potential also exists for additional hogs to come
from PSF's Texas operations. Mr. Meyer continued, "Increasing the
processing capacity at the Milan plant illustrates one initiative
in our plans to grow PSF both organically and through acquisitions.
In addition, the expansion will help us to achieve our strategic
goal of moving more of our business mix into the processing
segment." PSF is one of the largest vertically integrated providers
of pork products in the United States, producing consistent, high
quality pork products for the retail, wholesale, foodservice,
export, and further processor markets. PSF is the nation's second
largest pork producer and sixth largest pork processor, with
approximately 4,100 employees working at farms and processing
facilities in Missouri, North Carolina, and Texas. This news
release contains "forward-looking statements" within the meaning of
the federal securities laws. Naturally, all forward-looking
statements involve risk and uncertainty and actual results or
events could be materially different. Although we believe that our
expectations are based on reasonable assumptions, we can give no
assurance that our goals will be achieved. Important factors that
could cause actual results to differ include: economic conditions
generally and in our principal markets; competitive practices and
consolidation in the pork production and processing industries; the
impact of current and future laws, government regulations and
fiscal policies affecting our industry and operations, including
environmental laws and regulations, trade embargoes and tariffs;
domestic and international transportation disruptions; food safety;
the availability of additional capital to fund future commitments
and expansion and the cost and terms of financing; outbreaks of
disease in our herds; feed ingredient costs; fluctuations in live
hog and wholesale pork prices; customer demands and preferences;
and the occurrence of natural disasters and other occurrences
beyond our control. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed might not occur.
DATASOURCE: Premium Standard Farms, Inc. CONTACT: Investors, Steve
Lightstone, CFO of Premium Standard Farms, Inc., +1-816-472-7675
Web site: http://www.psfarms.com/
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