Bell & Evans Building Two New Processing Plants

5/24/2014 7:00 AM
By Philip Gruber Staff Writer

FREDERICKSBURG, Pa. — A high-end Lebanon County chicken producer is in the midst of a major expansion project that will triple the size of its processing and packing space.

Bell & Evans will open a new 160,000 square-foot plant early next year that will increase the company’s processing capacity by 20 percent.

For a company that usually grows by 10 to 14 percent a year, though, “that doesn’t last long,” said Scott Sechler, the company’s president.

To address that longer-term need for space, Bell & Evans is settling on a second property next month that will eventually add 2.5 million birds per week to its capacity.

The company currently slaughters just under 1 million birds a week, Sechler said.

Construction of that larger building should start in 2017.

Both sites are within a few miles of the original Fredericksburg factory.

The first new plant will cost $40 million plus equipment. It is too early to say what the second building will cost, Sechler said.

Bell & Evans is known for its lines of antibiotic-free, organic and gluten-free chicken products sold at upscale grocery stores and restaurants. All of the chickens and their feed come from the United States.

Thanks partly to the rapid expansion of major customers like Wegmans and Whole Foods, Bell & Evans has grown without adding any new customers for five years, Sechler said.

At first, “everybody kind of laughed” at the all-natural label. Now everyone is doing it, said Sechler, who bought the business in 1984 when he was 24 years old.

The company has 140 to 150 growers now and is adding 25 growers a year, a pace Sechler expects to continue as the new plants are built.

In the Mifflin County area, Bell & Evans is adding eight pullet houses to raise young layer hens, and 16 houses for the mature layers to live in, he said.

The first new plant will add 250 employees, and the second will add 1,200 to 1,500. The company currently employs 1,200 people, making it the largest private employer in Lebanon County, Sechler said.

“Here we never lay people off. We always seem to be adding stuff,” Sechler said.

The building Bell & Evans is currently constructing will have a European look. A high-end product should come from a good-looking building, not one that looks like a factory, Sechler said.

Much of the processing equipment will come from the Netherlands and Germany, Sechler said.

Both new sites come with existing businesses that Bell & Evans will keep open.

The first plot is home to Esther’s Restaurant, which Bell & Evans is renting to its former owner. Sechler plans to remodel the restaurant and its Swiss-style façade.

The second site currently houses the Keystone Rendering plant, an important company to have when your primary business needs a place to send its chicken bones, blood and innards, Sechler said.

Sechler credited Gov. Tom Corbett and the state Department of Community and Economic Development, which offered the company more than $5 million in aid, for helping to make the project a reality.

“They are really pushing for jobs in this state,” Sechler said.

The state helped with the permitting process, gas, electric, a traffic light and whatever else the company needed, Sechler said.

The school board, township and county have all been supportive, and the county granted the Bell & Evans a tax abatement.

“We’re fortunate that we have so much support for poultry processing in Lebanon County,” Sechler said.

Still, the permitting process has slowed down the plant expansion projects. Sechler said he bought the Esther’s Restaurant site five year ago and is only now getting to build.

“Money isn’t an issue. It’s bureaucracy,” he said.

The same holds true for farmers looking to build chicken houses. Permits that used to take six months now take up to two years.

“It puts a lot of farmers where they can’t even finish the project,” Sechler said.

Fulton Bank and a handful of Pennsylvania-based partner banks are financing the project. Sechler said he was glad he could stay with local banks that know agriculture well.

Bell & Evans is the rare chicken company that requires farmers to have cement floors on their houses and to completely clean out their houses after every flock, Sechler said.

The others save money by using dirt floors and letting the manure pile up longer, he said.

The company has competitive contracts, though the extra construction costs, like the cement floor and outdoor access, do not work for all growers, Sechler said.

After the high grain prices of the past few years, many farmers were actually able to build chicken houses without financing. It was a more lucrative route than banking the money for meager interest, Sechler said.

One of the largest organic grain buyers in the country, Bell & Evans will soon be processing as many soybeans as the proposed Perdue plant in Lancaster County — without using any hexane, a chemical Bell & Evans has not used for 25 years, Sechler said.

Bell & Evans is signing organic grain contracts for the next two years, he said.

The expansion also helps the wood industry, as more houses require more sawdust, and the mushroom growers who get most of the used litter.

Because the houses change the litter after every flock, the manure is proportional to the wood shavings, making a higher quality than shavings with more manure, Sechler said.

The high beef and pork prices have not affected Bell & Evans too much, Sechler said.

Price spikes in other meats may help commodity chicken sales, but Bell & Evans customers tend to buy chicken every week and are not price-driven, Sechler said.

If there is a food-safety scare, “people gravitate a little bit toward the more expensive stuff,” Sechler said.

Besides using organic feed, organic processors have to clean their pipes with different products.

“You don’t see all that stuff, and you don’t always taste all that stuff,” but it makes a difference in the residues that can contact the chicken, he said.

Another sort of expansion at the company is more personal.

Sechler’s 19-year-old son, Scott Jr., is now the company’s vice chairman. The younger Sechler attends Whole Foods openings around the country and is majoring in poultry science at Penn State.

Sechler expects his daughter, currently working in medicine, may join the business eventually too.

Both children have accompanied their father on business meetings, which shows customers that the company has a strong future ahead.

“It’s also encouraging for me,” Sechler said.

Does milk have a lot of untapped potential in today’s competitive beverage market?

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