US poultry giant announces plant closures

Troubled US poultry giant Pilgrims Pride is planning to close three plants in the next few weeks, affecting 3000 jobs.

In late 2008, the company entered Chapter 11 Bankruptcy Protection to allow a reorganisation in an attempt to bring the firm back into profitability.

Pilgrims Pride said that it plans to make the three plants located in Douglas, Georgia El Dorado, Arkansas and Farmerville, Los Angeles, idle with the intention of improving its product mix by reducing commodity production and to significantly reduce its costs.

The US sector is suffering from overproduction of chicken coupled with weak consumer demand because of the downturn.

Also being affected are the 430 independent contract growers who supply birds to these three plants.

Pilgrim’s Pride estimates that the closure will bring annual net savings of about $110m (£77.4).

Don Jackson, president and chief executive officer of Pilgrim’s Pride, said: “We are producing too much commodity chicken in what is a very weak market.”

Mr Jackson added that the measures would reduce the production of low-value, commodity meat. The company plans to keep the plants idle until conditions improve.