Lamb Weston Ups Dividend, Plans Another Plant Expansion
December 21 proved to be “daily double win” for present and future employees of Lamb Weston in Hermiston, Oregon, and shareholders from all parts as the Eagle, Idaho, USA-headquartered company announced a major expansion of frozen french fry processing capacity in North America and an increase in its quarterly dividend.
Lamb Weston intends to expand operations at its Hermiston factory with the construction of a 300-million-pound per year, state-of-the-art french fry line. It will be modeled on the company’s recently inaugurated production line in Richland, Washington, and is expected to be up and running by the fourth quarter of fiscal 2019. The expansion should add up to 170 full time jobs to the payroll.
“The french fry category has been growing at attractive rates around the world, and we believe industry capacity has been challenged in recent years to keep up with continued growth in market demand. This investment in a new processing line in the Columbia Basin reflects our continued commitment to support strategic partners as they continue to grow their businesses in North America, Asia and beyond,” said Tom Werner, president and ceo of the frozen potato, appetizer and vegetable production and marketing company.
Oregon Governor Kate Brown has approved an award from the state’s Strategic Reserve Fund to help move the project forward. Taxpayer dollars are being directed to “support infrastructure development at the site, workforce training and diversification.”
The total investment for the new line is expected to be approximately $250 million, with capital expenditures of about $25 million and $225 million in fiscal years 2018 and 2019, respectively.
Meanwhile, the Lamb Weston’s board of directors declared a quarterly dividend of $0.19125 per share of common stock, up from $0.1875 per share in the prior quarter. The dividend is payable on March 2, 2018, to stockholders of record at the close of business on February 2, 2018. In addition, the company stated that it will target an annual dividend payout ratio of 25% to 35% of adjusted diluted earnings per share.