KANSAS CITY, Mo. -- Premium Standard Farms Inc. announced today that its board of directors has approved the expansion of the company's Milan, Mo., hog processing plant.



According to a recently completed engineering and feasibility study, the improvements will increase processing levels to 10,000 head per day vs. the current level of 7,400 head per day. This translates into 15 percent more total company processing capacity, while representing growth of the capacity at the Milan plant by 35 percent.



The expansion project will increase PSF's capital investments by approximately $23 million, and the planned ramp-up of capacity will begin in the second quarter of calendar year 2007.



John Meyer, CEO of Premium Standard Farms, said, "The decision to expand our Milan plant is a critical component to our growth strategy. Our integrated system satisfies the needs of our discriminating customers by providing consistent, high quality pork products. This investment will allow us to meet increasing international and domestic demand for our products as we continue to further enhance our export business and expand our domestic customer base."



The company will acquire the additional hogs necessary to expand the processing levels at the Milan plant from three sources:


  • PSF's Missouri farms, which have experienced increased productivity from the existing sow base.


  • Outside producers that would become part of PSF's Processed Verified Program. This is based on a successful model that was instituted at the company's North Carolina plant, which currently obtains approximately 25 percent of its head from other Processed Verified suppliers.


  • The potential also exists for additional hogs to come from PSF's Texas operations.



  • "Increasing the processing capacity at the Milan plant illustrates one initiative in our plans to grow PSF both organically and through acquisitions," Meyer said. "In addition, the expansion will help us to achieve our strategic goal of moving more of our business mix into the processing segment."



    PSF is one of the largest vertically integrated providers of pork products in the United States, producing consistent, high quality pork products for the retail, wholesale, foodservice, export, and further processor markets. PSF is the nation's second largest pork producer and sixth largest pork processor, with approximately 4,100 employees working at farms and processing facilities in Missouri, North Carolina and Texas.



    SOURCE: Premium Standard Farms, Inc. via PR Newswire.