040305 Allen Family Foods to Expand Delaware Plant

Wilmington, DE - Allen Family Foods Inc. is investing $20 million to expand its Harbeson chicken-processing plant and will hire 175 additional workers there, the company said Thursday.

The Seaford-based poultry company is renovating 6,000 square feet in the existing building, adding 44,000 square feet and increasing its work force to better market its products to retailers. The plant now employs about 770 people.

It will receive $2 million from the Delaware Economic Development Office to help with construction costs. State officials are encouraging the company to use local contractors, and the grant money is contingent on the project's completion, scheduled for August.

The expansion comes as the company shifts its focus from selling 40- pound bulk boxes of chicken to brokers to preparing more 1- to 2-pound packages of chicken on plastic foam trays ready to ship to supermarkets and other retailers.

"We are focusing on the retail customer," said Charles C. Allen III, president and chief executive of the 85-year-old, family-owned company.

The tray packs will be sold under the Allen's brand name or a private label, depending on the retail customer. Tray-packed chickens tend to be more profitable to a company, because of the consumer demand and more consistent pricing, the company said. The company would not identify its retail customers.

Richard Lobb, spokesman for the National Chicken Council, said selling directly to retailers should help Allen's become more competitive. The Allen's name, like Perdue or Tyson, could be on more chicken.

Allen's was the 20th-largest poultry company in terms of average weekly ready-to-cook production, according to a January 2003 ranking by the WATT PoultryUSA trade publication. Salisbury-based Perdue Farms Inc. was No. 5, while Selbyville-based Mountaire Farms Inc. was No. 8. Tyson Foods Inc. of Springdale, Ark., was the largest.

Gov. Ruth Ann Minner said Allen's decision to expand in Delaware will have a positive impact on the state's $494 million poultry industry, as well as the area's overall economy.

The announcement is welcome news for the state's poultry industry, which is in the process of trying to contain an avian flu outbreak. A strain of the virus that is potentially fatal to chickens but not to humans was detected at two Delaware farms in February, prompting dozens of countries to ban chicken exports from the state and the nation.

Company managers said the state grant was an incentive for Allen's to expand in Harbeson rather than in Maryland, where it has two processing plants.

Once the expansion is complete, the Harbeson plant will be able to process about 60 million pounds of chicken a year, five times more than now.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com