Pilgrim's Pride Follows Recent Trend Of Production And Market Expansion In Mexico

Poultry processor has announced plans to create a new production site in Veracruz, Mexico, looking to take advantage of the region’s market and growing economy as other big food manufacturers have done recently

On Feb 20, in a conference call focused Pilgrim’s Pride’s fourth-quarter performance, Bill Lovette, the company’s President and CEO, announced plans to build a poultry processing complex in Veracruz, Mexico. Pilgrim’s Pride has selected Veracruz due to its large population, increased consumption of chicken, and its geographic location near a port for easy access to imported feed grains. Lovette says, “This is a new geographic market with a growing economy, making it an ideal area for us to expand, using a grower model similar to our U.S. operations.”

The new expansion planned for Pilgrim’s Pride in Mexico comes at the heels of an announcement made in November that the company would be shutting down a facility in Boaz, AL, effective Jan 24, and absorbing extra processing capacity with the expansion of its facilities in Russellville, AL and Douglas, GA.

Construction of the new site will be done in phases, the first of which being live chicken sales, followed by the eventual construction of the processing plant.  Lovette explains, “We'll build our feed mill and a hatchery, import hatching eggs, and then build out our breeder supply there. Then the next step is to build a processing plant as the needs tell us to.”

Pilgrim’s Pride isn’t the only company looking to capitalize from expansion in Mexico. Mondelez International has invested $350 million in building the world’s largest cookie and biscuit manufacturing facility in Monterrey, with plans to be operational in the second half of 2014.  Nestle has also announced plans to pump money into Mexico with a planned $1 billion investment over five years to build plants and facilities. Of the $1 billion expenditure, $60 million will be directed toward the upgrade and expansion of its cereal operations.  PepsiCo aims to invest $5 billion over five years into operations in Mexico with the goal of expanding its food and beverage business in the region.

With a growing middle class and opportunities for long-term growth, Mexico has become a prime location for these large companies to invest.  Seizing the opportunity to capitalize on Mexico’s emerging market means investing now and enjoying growth, as the economy and consumer spending power increases in the near future.