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Tyson Foods to build $320M chicken operation near Tonganoxie; plans to employ 1,600

Doug Ramsey, group president of poultry for Tyson Foods, Inc., answers media questions as the company announces plans to build a $320 million poultry processing plant near Tonganoxie. The project is still subject to regulatory and financing approval. Enlarge photo

September 5, 2017, 12:44 p.m. Updated: 5 September 2017, 4:32 p.m.

Tyson Foods, Inc., on Tuesday announced plans to build a $320 million poultry processing plant near Tonganoxie — on a site about 10 miles from Lawrence — sparking controversy in this small town of about 5,300 people.

Company officials said they hope to bring the plant into production in mid-2019, employing up to 1,600 people and processing as many as 1.25 million birds per week.

The announcement in downtown Tonganoxie drew an overflow crowd to the Brunswick Ballroom where Gov. Sam Brownback and other state officials cheered the project. “I think it’ll be a great thing for Tyson,” Brownback said at the announcement. “I think it’ll be a great thing for our state and broaden that portfolio of what we do to provide to a hungry world our quality protein sources.”

But the announcement also drew protestors who stood outside the building, arguing that such a plant would attract low-wage jobs and reduce the quality of life in their community.

“I think it’s not the right kind of jobs,” said Tana Walker, a McPherson native who moved to Tonganoxie with her husband in April. “I am from a factory town. I’m all for good, high-paying unionized factory jobs, but Tyson has a history of amoral, horrible conditions in their plants. The type of jobs they bring are not the types that save communities. They kill communities.”

Doug Ramsey, group president for poultry at Tyson, said jobs at the plant would offer starting wages of between $13 and $15 an hour.

Tyson, based in Springdale, Ark., is one of the largest food companies in the world. The company said the Tonganoxie plant will produce pre-packaged trays of fresh chicken for retail grocery stores nationwide.

Earlier this year, Tyson announced it was shifting to what it calls “No Antibiotics Ever” or NAE production in its branded retail chicken products, making it the world’s largest producer of NAE. The Tonganoxie plant will be part of the continued expansion of the company’s NAE offerings, the company said.

Ramsey said the site in northeast Kansas offers some strategic advantages.

“Tonganoxie is a great location for a poultry complex, with the availability of corn, the ability of the Interstate highways to go north and south, east and west, and the ability to supply our consumers, plus the availability of labor in this area is very high,” Ramsey said.

Tyson plans to purchase an approximately 300-acre site just south of the city. The southern edge of the site is about one mile north of the Tonganoxie/Eudora interchange on the Kansas Turnpike.

That site would house a state-of-the-art processing plant as well as a hatchery and feed mill. It also plans to contract with northeast Kansas farmers and ranchers who will raise the Tyson chickens in their own facilities.

That’s a business model that has become increasingly common in the livestock industry in recent years, especially in pork and poultry production. But it’s one that many people have criticized because it tends to shift much of the financial risk and legal liability of livestock production onto the backs of individual ranchers.

Brownback, however, defended that business model as being standard in the livestock industry today.

“I grew up raising chickens. We had a thousand chickens on our farm. They were layers, and I gathered the eggs every morning,” Brownback said. “That industry, that structure, no longer exists. You can’t find people that will buy that quantity of eggs. We’ve got farmers market outlets that are very good, and we’ve got a well formed, well developed farmers market structure, but the poultry industry is a vertically integrated industry, and if you’re going to do major poultry production, I don’t know how else it can be done.”

Stephanie Ventura said she and her husband moved to Tonganoxie about three years ago from Emporia, where Tyson operates a large beef processing plant. She said she does not look forward to having Tyson move into Tonganoxie.

“We wanted to get away from the Tyson in Emporia,” she said. “It stinks up the whole town. It’s just not a wonderful way of life.”

Ramsey, however, said Tyson is sensitive to the concerns of the community.

“Everyone has their opinion and we need to hear their opinion and understand their concerns so we can address them, and that’s why we plan to have town hall meetings over the next couple of months, to listen and address their concerns,” he said.

Tonganoxie’s mayor expressed support for the project as part of the announcement.

“Tonganoxie is looking forward to a successful partnership with Tyson Foods,” Tonganoxie Mayor Jason Ward said in a press release. “We have planned for a development of this type for many years by making strategic investments in public infrastructure targeted to support future industrial growth. This project will bring much anticipated opportunities for local residents to enjoy the quality of life benefit of working close to home. Tyson has a long history of support for small towns and local markets. They will be a great fit for our community.”

Officials said the project is still subject to approval of Tyson’s development plan and negotiation of a final incentive package.

Last week, Leavenworth County commissioners gave tentative approval to a resolution authorizing the issuance of $500 million in industrial revenue bonds that would be used to finance the project. The county would not be liable for repaying those IRB’s, but the instruments would enable the county to issue property tax abatements as an economic development incentive.

David Van Parys, interim county counselor for Leavenworth County, said the county is still negotiating how much of an abatement it will offer.

The county plans to hold public hearings before taking a final vote on issuing those IRBs.

Top employers

If Tyson Foods does end up employing 1,600 people as projected, it immediately will be in the running to be the largest private employer in either Leavenworth or Douglas counties. Here’s a look at how the chicken processing plant would compare to several other large employers — both public and private — in the two-county area.

• University of Kansas, Lawrence: 9,800

• Fort Leavenworth: 4,185

• Lawrence Public Schools: 1,800

• General Dynamics, Lawrence: 1,500

• City of Lawrence: 1,455

• Lawrence Memorial Hospital: 1,320

• Leavenworth Public Schools: 995

• Lansing Correctional Facility: 913

• Berry Plastics: 740

• VA Eastern KS Health System, Leavenworth: 700

• Northrop Grumnan, Leavenworth: 700

• Tonganoxie Public Schools: 260

• Peruvian Connection, Tonganoxie: 100

All job totals approximate

Sources: Economic Development Corporation of Lawrence and Douglas County; Leavenworth County Development Corporation.

Originally published at: http://www2.ljworld.com/news/2017/sep/05/tyson-foods-build-state-art-chicken-operation-east/