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May 12, 2009
BATON ROUGE - Poultry products company Foster Farms must hire 650 workers within two months and 1,000 within a year at a chicken plant in Farmerville to avoid financial penalties under an agreement the company signed with the state for public assistance in buying the facility.
The agreement, released by state officials Tuesday, revealed new details about the deal that Gov. Bobby Jindal's team struck with the California food processor in an effort to save the plant from closing. Pilgrim's Pride has idled the plant as part of its reorganization under the supervision of a federal bankruptcy court.
Foster Farms plans to buy the complex from Pilgrim's Pride for $80 million and make $20 million in improvements. The governor will give Foster Farms $40 million toward the purchase and $10 million toward the upgrades.
The Joint Legislative Committee on the Budget will meet to consider the agreement either Wednesday or Thursday.
Foster Farms must buy at least 95 percent of its poultry inventory from contract growers, rather than the company's own farms. The provision is meant to protect the hundreds of farmers in Louisiana who supplied Pilgrim's Pride and the banks that backed the farmers' loans.
If the plant closes in the first two years or is sold to a buyer not approved by the state, Foster Farms would have to pay the state $45 million. The amount of that penalty would decrease in each subsequent year until 2018, when the payment would be $1 million.
Foster Farms must have 1,000 workers and a payroll of $20.2 million in the second year of operation, or it would have to pay the state 30 percent of the amount by which it missed the payroll goal.
The obligation in the third year would bump up to 1,100 workers and a $24.7 million payroll. The job level would never need to be higher than 1,100, but the payroll targets would increase annually until reaching $30.4 million in the 10th year of operation.
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