One of the state's largest poultry processors said yesterday that it will spend $11 million to expand two of its Eastern Shore plants and hire 750 workers during the next two years.
State taxpayers will provide a $1.7 million grant to Allen Family Foods Inc. to aid the expansion, which is supposed to bring above-minimum-wage jobs to the towns of Hurlock and Cordova.
The expansion also will bolster what is already a key business on the Delmarva Peninsula and Maryland's No. 1 agriculture product.
"Our overall sales have increased and we needed added chicken capacity to meet our sales needs," said Pat Cauley, president of the family owned Allen Foods, which is based in Seaford, Del., and already employs 1,270 at the two Maryland plants and 2,800 overall.
"Instead of going off the Shore and trying to purchase or build a facility, we decided to invest our money here."
The processing jobs will require some training, the company said. Most will be low-skill, although there will also be some supervisory positions.
Allen and government officials say they are concerned that they will have trouble filling so many entry-level positions so fast.
To get the grant, the company had to promise to pay the workers 150 percent of the federal minimum wage of $5.15 an hour, plus benefits.
State and local authorities praised the expansion because the industry has not been growing in recent years.
Converting Shore farmland into nonagricultural uses has diminished the amount of corn and soybeans available locally to feed chickens and made it more costly to do business.
Further, recent avian influenza outbreaks and environmental concern about poultry waste have brought negative headlines that the industry has had to work to counter.
It employs 16,000
Chickens are big business on the Shore. Based on federal data, the poultry industry in Delmarva employs about 16,000, with labor income reaching $400 million, according to Delmarva Poultry Inc., the peninsula's industry trade association. Chickens account for about a third of the state's farm income.
Production last year was little changed from the year before, according to the U.S. Department of Agriculture. Maryland ranked eighth in broiler production, with the state producing 271.8 million broilers of the nation's 8.9 billion total.
Poultry consumption has grown rapidly since 1960, when Americans ate an average of 34.3 pounds a year, federal statistics show. The National Chicken Council estimates that per capita consumption will rise to 108.2 pounds in 2007, compared with 62.5 pounds for beef and 51.5 pounds for pork.
Expanding the production to meet the demand means more jobs, said David W. Edgerley, secretary of the Maryland Department of Business and Economic Development. The agency granted Allen the money, which will be used for equipment and job training.
He said the state has to balance support for agriculture and other kinds of development. But the Allen jobs will replace many of those lost in manufacturing on the Eastern Shore in recent years. Most companies promise only 50 or 100 jobs, so he said 750 is significant.
"We expect a payback and return on our investment," Edgerley said. "In this case, we're getting the capital investment on the part of the company and the new jobs in two counties."
Specifically, the company will spend $6 million on its Hurlock plant in Dorchester County and hire 350 new workers. It now employs 700 there.
Hiring 400 in Cordova
In Cordova in Talbot County, Allen will spend $5 million and hire 400. It now employs 570 there.
Bradly A. Broadwell, Dorchester County's economic development director, said the county has lost about 800 jobs over the past year as four manufacturing plants have closed or moved elsewhere.
And while the wages at Allen are expected to be significantly lower than what some senior workers had been making, the jobs are welcome in a place where per capital annual income is about $24,000.
Broadwell said the county and state would help Allen identify and train workers for the new jobs.
Local officials also will aid the expansion by upgrading water and sewer lines to the plants.
"Dorchester has been so reliant on manufacturing; here it's like 25 percent compared with Maryland in general, which is only about 3, 4 or 5 percent in manufacturing," Broadwell said.
"We've been so totally stacked that it was bound to hit us harder when manufacturers started to move offshore, which is something we're facing all over the United States," he said.
"Allen is one of our biggest employers already and to get so many new jobs at once - and not all low-skill jobs, but some supervisory jobs and electrician jobs - we're really happy about this."
Allen Foods is one of the four largest producers on the Eastern Shore. Cauley, Allen Foods' president, said sales are going up, although he wouldn't disclose the private company's revenue or growth rates.
The company Web site says Allen processes about 2.5 million birds and packs about 10 million pounds of finished products a week, yielding more than 500 million pounds of poultry products a year. In 1996 the company exported about 100 million pounds of poultry products.