July 25, 2007

  

Doubts cast on construction delays in Smithfield beef plant

 

 

The weeds are about the only things that have made progress the past seven months in the Oklahoma Panhandle farm field where a US$200 million Smithfield Beef processing plant is to go.

 

The company's ongoing delays in building near the tiny cattle town of Hooker have locals and politicians wondering whether the project will ever happen.

 

Howard Kopel, who lives a couple miles from where the plant is to go, questions whether the company has been truthful.

 

"The biggest thing would to be lied to," he said. "How can they have been so successful in doing that? They had to have some help from somebody, unknowingly perhaps, but I don't know."

 

Last October, the Green Bay, Wisconsin-based company announced construction would begin in January. Since then, the unit of Smithfield Foods Inc. (SFD) has been tightlipped about plans to break ground on the project while the delays pile up.

 

Hooker, a struggling Texas County town of about 1,700, has seen Main Street businesses close and folks leave for neighbouring cities in the past decade. It had been grasping for an economic lifeline.

 

Enter Smithfield, which would bring the largest beef plant built in the US in 20 years to town. With it, as many as 3,000 jobs and a shot at putting the place back on the map.

 

But these days, residents say promises have turned into excuses.

 

The January groundbreaking was moved to sometime in the first quarter of 2007 because the engineering, design and bidding process was taking longer than expected.

 

Then, in March, those plans were bumped again. The company said it was "finalizing the engineering plans for the facility because we are looking at several options and enhancements."

 

Today, with one month of the third quarter almost checked off the calendar, a spokesman said Smithfield was "still finalizing plans" and that "progress was still the same."

 

State officials have also been left with few details.

 

Friday, the company contacted the Oklahoma Department of Agriculture, Food and Forestry to say it was preparing to provide utilities for the site, but gave no date when that would begin.

 

"That's really all we know," said department spokesman Jack Carson. "We don't have any clue what their timetable is."

 

State Rep. Gus Blackwell, whose district includes Hooker, said he has "no concrete evidence" the plant is even coming, and expects Smithfield to announce one way or another by the end of summer.

 

"I've had no communication with them that this is an absolute done deal," Blackwell said.

 

Some residents who oppose the plant say they don't care if they have been duped, they just don't want the thing built.

 

"I hope they just delay forever," said Verna Hairford, who lives south of where the plant will go on land that's been in her family since 1904.

 

Hairford says Hooker's salvation doesn't lie in a beef plant, but a dependable business that will employ 20 or 30 people and build from there.

 

"It would cost so much for the city, the infrastructure, the schools, and they don't have the money to build," she said.

 

Days after the plant's announcement, a JP Morgan Chase analyst wrote that a processing plant that size - that would process 5,000 head of cattle daily - would add too much capacity to the industry.

 

The report also questioned whether Smithfield was even going to build in Hooker, theorizing the company's real goal might be to buy out longtime rival Swift & Co., a deal that didn't materialize.

 

But Smithfield officials have said there would be plenty of room in the region for the beef operation and that the "plant is happening."