Burger King backs meat processing plant; Diversity Food will be one of the nation's largest black companies.

Burger King Corp. and Hudson Foods Inc. are backing the formation of a meat-processing plant in Virginia that will be one of the largest black-owned companies in the country.

The new company will be located in Petersburg and will be called Diversity Food Processing LLC. Groundbreaking ceremonies for the $20 million, 75,000 square-foot facility were set for September and construction is scheduled to be completed during the spring of 1995, according to Burger King spokesman Michael Evans.

Stephen B. Singleteary, president and CEO of Diversity, will own 62% of the company. Burger King and Hudson will divide the remaining shares.

"Not only is this a major minority-owned business, but it's a facility that Burger King needs," explained Singleteary, 38, a Chicago resident who had owned 15 Burger King franchises in four states.

Singleteary explains he's selling his franchises to concentrate on Diversity. "I can't do both," he says.

The deal was also made possible by Miami-based Restaurant Services Inc. (RSI), an independent purchasing company that supplies Burger King restaurants. RSI agreed to purchase beef products from Diversity, which allowed the new company to get financing through the Northern Trust Co. in Chicago.

Once it's fully operational, Diversity is expected to have $125 million in annual sales. It will supply beef products to Burger King restaurants in eight to 10 states and to grocery stores. The company will employ about 60 people, Evans says.

Hudson Foods, based in Arkansas, is one of the country's largest producers of poultry products. It operates 14 processing plants in 10 states, employs more than 8,500 people and reported $920 million in sales in fiscal year 1993.

In May, Hudson announced it was building a similar facility in Columbus, Neb., that will also supply Burger King restaurants.

James T. "Red" Hudson, chairman and CEO of Hudson, said his company,s investment in Diversity reflects its confidence in Singleteary. "Together, we will build a world-class operation that will be unsurpassed in the industry," Hudson says.

In 1983, Burger King made pledges to Operation Push that it would develop more opportunities for minorities. The company later formed a Diversity Action Council (DAC) to recruit blacks Asians, Hispanics and Native Americans.

"This is one of several initiatives in progress as part of an eight-point diversity action program," says Scott Colabuono, chairman of Burger King's DAC and the corporation's CFO.

Under that plan, Burger King has earmarked $100 million to develop minority franchises and suppliers over the next five years. Half of that amount will be used as start-up capital, according to the company (see September 1994 cover story, "More Than Just Window Dressing?").

Several other large corporations have made commitments to minority hiring and ownership opportunities, but Burger King's program may be the most ambitious.

"We're talking about a significant investment to establish Diversity Food," says Bruce Taylor, president of the Minority Franchise Association and a member of Burger King's DAC. "I'm satisfied that we're making progress. This is just an initial step."