Poultry giant: automate to reduce costs
Poultry giant Pilgrim’s Pride plans to increase automation and raise prices in its foodservice contracts with the aim of offsetting the impact of rising costs and labour shortages at its plants.
Pittsburg, Texas-based Pilgrim’s Pride said it struggled with a $189 million increase in feed ingredient costs in the fiscal 2007 year ended 29 September. Furthermore, if market conditions do not change, it is anticipated that the company will face an even steeper $345 million increase in feed costs for its 2008 fiscal year.
Automating job functions at poultry plants
According to Chief Executive O.B. Goolsby Jr., automation will be a key focus of the company’s capital investment programme in fiscal 2008. “We believe this investment, which includes labour-reducing technology, will enable use to move more products to our plants efficiently and help alleviate some of the recent issues related to a tight labour market and higher input costs.”
Chief Operating Officer J. Clinton Rivers said that the company is now installing automated equipment in selected plants to help ease increased competition for workers. This technology will eliminate the need for some 250 jobs, while also reducing overtime and the reliance on outside processors, he said, adding that Pilgrim’s Pride anticipates similar investments throughout the balance of fiscal 2008 that will “eliminate the need for hundreds of positions, most of which are unfilled today”.
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