In­vest­ing in pet food

$30 mil­lion Sim­mons factory to bring 78 jobs to Siloam Springs.

Northwest Arkansas Democrat-Gazette - - FRONT PAGE - NATHAN OWENS

The $30 mil­lion that Sim­mons Foods Inc. has in­vested in a new factory in Siloam Springs is con­sis­tent with the com­pany’s re­cent moves to main­tain its po­si­tion in the pet and an­i­mal feed pro­duc­tion mar­ket.

Sim­mons Feed In­gre­di­ents, an af­fil­i­ate of Sim­mons Foods, held a rib­bon cut­ting cer­e­mony Mon­day for the 72,000-square-foot fa­cil­ity that will bring 78 new jobs. Of those po­si­tions, 44 are hired and work­ing at the plant, said Donny Epp, spokesman for Sim­mons Foods. The fa­cil­ity will pro­duce fresh and frozen meat in­gre­di­ents for pet food man­u­fac­tur­ers.

The pri­vately owned com­pany broke ground December 2015 and the project is sup­ported by the Arkansas Eco­nomic Development Com­mis­sion. For the project, Sim­mons qual­i­fied for two tax in­cen­tives: the Arkansas Ad­van­tage pro­gram, based on job cre­ation and wage thresh­olds; and Tax Back pro­gram, based on build­ing ma­te­ri­als and tax­able ma­chin­ery pur­chases. Sim­mons also earned a $1 mil­lion grant from the com­mis­sion sup­port­ing waste­water treat­ment op­er­a­tions at the new fa­cil­ity.

While many meat and re­tail com­pa­nies are tweak­ing

food pro­cess­ing plants to pro­duce new pack­aged prod­ucts, com­pa­nies such as Sim­mons are in­vest­ing in pet food and an­i­mal feed pro­duc­tion.

“Sim­mons is look­ing to strate­gi­cally build where there’s op­por­tu­nity,” Epp said.

Sim­mons de­clined to com­ment on whether its strat­egy is to in­vest fur­ther into pet food and an­i­mal feed pro­duc­tion, or into prod­ucts for hu­man con­sump­tion. The com­pany at­trib­uted its busi­ness diver­si­fi­ca­tion — Sim­mons Pre­pared Foods, Sim­mons Pet Food, and Sim­mons Feed In­gre­di­ents — for its abil­ity to han­dle mar­ket peaks and val­leys.

“With a project of this scale, ob­vi­ously it has to make sense in­ter­nally,” Epp said

His­tor­i­cally, the pet food in­dus­try has the ad­van­tage of being nearly re­ces­sion proof.

Ac­cord­ing to the Amer­i­can Pet Prod­ucts As­so­ci­a­tion, Amer­i­cans are pro­jected to spend $69.36 bil­lion on their pets in 2017, with about 43 per­cent go­ing to­ward pet food ex­penses alone. Pro­jected na­tional spend­ing this year is up 15 per­cent, or about $9 bil­lion, com­pared to num­bers from just two years ago.

More than two-thirds of Amer­i­can house­holds to­day take care of just one pet, ac­cord­ing to a na­tional pet own­ers sur­vey.

The Siloam Springs-based com­pany be­gan as a poul­try com­pany in 1949. The com­pany’s feed in­gre­di­ents group was estab­lished in the 1950s and its pet food group in the ’60s, Epp said. In the past seven years the com­pany started shift­ing its fo­cus more to­ward an­i­mal treat pro­duc­tion.

Sim­mons Foods Inc. ac­quired Cana­dian-based Menu Foods Ltd. in 2010, which po­si­tioned the com­pany as a lead­ing sup­plier in store bought pet food. To keep its po­si­tion, Sim­mons be­gan pro­duc­ing more treats and dry pet food.

Bob Wil­liams, se­nior vice pres­i­dent of Sim­mons First In­vest­ment Group, said this is a natural step for a poul­try com­pany to make. Poul­try com­pa­nies use chicken byprod­ucts for pet food.

“They’ve done the math and fig­ured they can make a profit this way,” he said.

As well as broiler chicken fa­cil­i­ties, the pri­vate com­pany has a feed mill in Fair­land, Okla., mul­ti­ple in­gre­di­ent pro­duc­tion fa­cil­i­ties in South­west City, Mo., and the pet food in­gre­di­ent fa­cil­ity in Siloam Springs.

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