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High Costs Blamed as North Carolina Turkey Plant Closed

14 October 2014

US - Historically high meat costs have brought the announcement of the closure of House of Raeford's turkey cook plant in Rose Hill, North Carolina as the company focuses on chicken products.

House of Raeford has announced it will phase out all operations at its turkey cook plant in Raeford, North Carolina, within the next 60 days.

Historically high protein commodity market values have driven raw material costs for cooked turkey products up over 250 per cent in the last 12 months, resulting in unprecedented finished product prices that the company’s customers are not able to absorb for competitive reasons.

Production of further processed and fully cooked chicken products now being made in Raeford will be moved to other plants.

This move will allow the company to focus more resources on vertically integrated production of fresh, ready-to-cook, further processed and fully cooked chicken products. The company embarked on a strategy to grow its chicken production volume and further processed chicken product lines
over a year ago.

“We’re experiencing significant growth in chicken production and further processing.” said Bob Johnson, President and CEO. “We believe vertically-integrated chicken production is our core competency and deserves 100 per cent of our attention and resources.”

Since announcing this strategy in March 2013, House of Raeford has expanded its chicken further processing operations by purchasing two plants.

The first plant, located in Mocksville, North Carolina, opened in April of 2014 and produces fully-cooked chicken products with plans to eventually employ 400 people. The second plant came with the acquisition of Atlanta-based Filet of Chicken, a company that produces par-fried and individually quick frozen (IQF) further processed products and employs 450. The Raeford plant currently employs about 400 associates.

Notices were distributed to plant associates on 10 October, alerting them of the pending closure. The company will provide financial assistance for all associates affected by the plant closure who meet the minimum tenure requirement by providing severance packages. The company will also work with local and state officials in an early intervention plan that provides transitional help for these workers.

“We are grateful to the employees who have worked in our Raeford, NC operation for their loyalty and dedication. We are committed to helping each of them during this transition,” said Mr Johnson.

This decision will not affect the remaining 5,300 House of Raeford associates, of which approximately 1,800 are employed in North Carolina.

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