New Simmons plant expected to benefit its other processing operations

by Kim Souza (ksouza@talkbusiness.net) 361 views 

Simmons Foods’ investment of $300 million into a modern chicken slaughter and primary processing facility has some wondering if jobs will shift from other operations in Van Buren and outside Northwest Arkansas.

Donny Epp, corporate spokesman for Simmons Foods, told Talk Business & Politics the new project, set to be operational in two years, will increase internal supply to the Van Buren and Fort Smith operations and other further processing plants, meaning the new complex will help those plants. Epp said the new plant is needed to address customer growth, and overall production capacity will increase 60% when the plant comes online in 2019.

Epp confirmed some production will shift from the older plant in Decatur to the new larger plant located a few miles away. He said Decatur also has a slaughter facility and pet food processing lines.

Simmons is one of the largest private businesses in Arkansas with 3,700 employed in the state and 6,000 companywide. The company’s annual revenue was an estimated $1.45 billion last year. The company runs three divisions – prepared foods, pet foods and animal nutrition. The largest is the prepared foods segment that had annual sales of roughly $860 million last year, according to Meat & Poultry.

The new facility will include a large slaughter plant giving Simmons the capacity boost its prepared foods segment supply which sells chicken into food service. Epp said Simmons’ prepared foods are customized for restaurant and institutional customers. He said the added primary processed chicken will go to the further processing and cook plants in Van Buren, Pineville, Mo., and Siloam Springs.

Simmons did not say how many additional farmers would be needed to supply the new plant. Simmons has almost 300 contract growers and it also operates 20 company-owned farms. The farms raise about 200 million chickens per year.

Simmons operates six processing plants. Three process chicken for prepared foods. The other processing plants in Arkansas, New Jersey and Canada process pet foods. A plant in Southwest City, Mo., processes feed ingredients from fat trimmings not used in the human food supply. Simmons operates three hatcheries located in Decatur, Siloam Springs and Southwest City, Mo. The feed mills are located in Decatur and Emporia, Kansas.

Epp said about 60% of Simmons workforce is in Arkansas. When the 1,500 jobs are added that will increase to about 74%.

Simmons will receive several million dollars in incentives from the Arkansas Economic Development Commission for the 1,500 new jobs the company said it will create. AEDC spokesman Jeff Moore told Talk Business & Politics the project qualifies for the Create Rebate which can provide up to 5% payroll rebate on the new jobs created. The project also qualifies for a Tax Back (sales and use tax refund) on the purchase of building materials and taxable machinery and equipment. Simmons also will get $5 million in a Community Development Block Grant as well as $2 million Community Block Grant for wastewater extensions with the new project. Moore said there is also an unknown benefit from the Governor’s Quick Closing Fund for a turn lane and a potential stoplight at the new plant.

Simmons opened in July a new $30 million pet food processing facility in Siloam Springs which created 78 new jobs. Epp said that plant creates premium pet foods, special recipes and formulations for its customers.

Nathan Reed, director of economic development for the Siloam Springs Chamber of Commerce, said Simmons knows the local workforce and having just opened a brand new plant is also well aware of all the environmental hoops required with a new poultry processing facility.

“We couldn’t be happier about this new project from Simmons and what it is going to mean for the local area and region,” Reed said.

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