Farbest plans $32.5M expansion and updates at Huntingburg facility

Farbest Foods will be expanding and updating its Huntingburg facility again.

Farbest Foods President Ted Seger appeared before the Huntingburg Common Council Tuesday evening to request approval for the release of economic development bonds to help fund the expansion. The company previously requested about $3.5 million in economic development bonds to be issued for a two-phase project that updated about a third of the facility’s processes back in 2017.

Seger pointed out those renovations and updates completed in 2018 have increased the company’s employee retention and greatly assisted them in getting through 2020. “The automation that we put in back then really, really helped us retain employees and make the jobs easier and safer, especially through this last year and a half,” he said. “It kept us going in both of our facilities. In general, the Farbest business is about as good as it has ever been.”

He explained the newest round is the final step in the completion of the planned renovations to the Huntingburg facility.

Farbest Foods CFO Jarod Morrison took the council through an overview of about $32.5 million in updates. The company plans on adding automation and modernizing and updating the layouts of its existing processing lines in several areas of the facility as well as adding a new building.

Morrison told the council that automation would replace about 22 positions. “But we have more than 22 positions open right now. This is really about helping us combat the challenges of filling the positions,” Morrison said.

He added that this update helps protect 640 jobs. “This is about making jobs easier and safer,” he told the council.

The investment is split between $17.7 million in personal property and $14.8 million in real property (buildings). Construction is set to begin in September with the new building completed by next summer and the updated operations finished by early fall.

“Through these investments, Farbest becomes more valuable in the turkey industry,” Morrison said.

As other turkey companies have struggled, Farbest has been in a position to help them through those challenges due to the updates completed at Huntingburg as well as the state-of-the-art facility the company has in Knox County.

“Other turkey companies have struggled in processing their own live turkeys over the past year,” Seger told the council. “For about a year, we have been taking in loads from a company in South Carolina, and for the past four to five months, we have been taking them from a different company in Missouri and Arkansas.”

He explained this was due to those companies struggling with staffing issues. This extra work has added about two hours of extra work daily at the Huntingburg facility.

“We are poised for growth,” Seger said. “A year from now in September, we will have two of the most automated, most modern turkey processing plants in the country.”

Farbest is seeking to purchase a million dollars in economic development bonds, and the debt service will be paid down by the incremental increase in taxes from the county TIF portion of the improvements. Additionally, the new bonds will be added to the remaining balance of the existing bonds issued in 2017. The bonds will be paid from the TIF district until it expires in February of 2034.

“Since 2016, we have invested $46.7 million in the Huntingburg operations,” he said adding they approached the city for assistance with TIF-backed bonds for $3.5 million of the $21.7 million in the first phase of that update. “The good news is we don’t come to the city every time we make an investment; we try to come to you when it makes sense for both parties.”

The Huntingburg Economic Development Commission will hold a public meeting at 4:15 p.m. on Tuesday, August 17, 2021, in the council chambers with the Huntingburg Economic Redevelopment Commission holding a meeting following it at 5:15 p.m. If approved, the council will review the ordinance for approval at its August 24th meeting.