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Sanderson Farms Confirms Investment Plans

24 July 2009

US - Sanderson Farms, Inc. has announced plans to proceed with a new poultry processing complex, hatchery and feed mill at Kinston in North Carolina. The Board also announced the quarterly dividend.

Sanderson Farms, Inc. has announced that its Board of Directors has approved plans to proceed with the construction and start-up of the Company's Kinston, North Carolina, poultry complex. Sanderson Farms previously announced plans on 24 April 2008, to invest approximately $126.5 million for construction of a new feed mill, poultry processing plant and hatchery on separate sites in Kinston and Lenoir County, North Carolina. On June 26, 2008, the Company announced its decision to postpone the project due to market conditions and escalating grain prices. The budget for the project is now expected to be approximately $121.4 million.

The Kinston facilities will comprise a state-of-the-art poultry complex with the capacity to process 1.25 million birds per week for the retail chill pack market. At full capacity, the complex will employ approximately 1,500 people, will require 130 contract growers, and will be equipped to process and sell 6.7 million pounds per week of dressed poultry meat at full production. The Company expects to begin construction of the facilities later this summer, with initial operation of the new complex scheduled to begin during the first quarter of fiscal 2011.

Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc., said: "We are pleased that better overall market conditions, our financial performance and a strong balance sheet have put us in the position to continue to grow our Company.

"We are also proud to honour our commitment to the economic development and governmental officials in, and citizens of, the City of Kinston, Lenoir County and the State of North Carolina.

"We believe this expansion will enhance our ability to drive revenues and earnings, and allow us to continue our record of building long-term value for our shareholders. The additional capacity of 1.25 million birds per week represented by the new complex will provide new marketing opportunities for the Company in the fresh retail market.

"We look forward to working with the local communities in North Carolina that have graciously supported Sanderson Farms and this project."

The Board of Directors also declared a regular quarterly cash dividend of $0.14 per share payable on 18 August 2009 to shareholders of record on 4 August 2009.

ThePoultrySite News Desk



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