Pilgrim's Pride fiesty when it's down

Monday, May 4, 2009

You wouldn't think that Texas-based Pilgrim's Pride, known as the world's largest chicken processor, had a lot of choice as it sheds assets in an attempt to stay afloat. Chief Executive Officer Don Jackson showed otherwise.

Pilgrim's announced on Feb. 28 that it would shut down three plants, among them one employing 1,300 in Farmerville, La. Within days, California-based Foster Farms offered $20 million for the plant, and Louisiana backed it with another $20 million. Pilgrim's Jackson refused the offer, saying that the sale would put Foster in the chicken business for a lower investment than Pilgrim's and the rest of the industry could compete with. Furthermore, the problem of too many plants and too few chickens would remain unresolved.

Days later, governor Bobby Jindal doubled Louisiana's offer, bringing the price for the plant to $60 million, a sign that perhaps he was low-balling the first time around. Later in March, Jindal announced, amid criticism, that the final price would be $80 million with the state kicking in $50 million, including $10 million in site improvements.

At press time, the state legislature had yet to approve the deal and laws had to be changed to access a development fund for the purchase. Along with the jobs, the purchase was expected to save 300 contract producers, 5,000 indirect jobs and $150 million in local and state taxes, according to Associated Press reports. BF