January 15, 2007

 

Tyson Foods plans beef expansion in Argentina

 

 

Leading US meat producer Tyson Foods Inc. recently announced it has formed a joint venture with two beef companies that could help it expand its international channels of beef distribution.

 

The joint venture, which would result in to create a fully integrated beef operation located in Santa Rosa, Argentina, is the meat giant's first participation in a beef operation located outside of North America.

 

The other two companies signing the joint venture include US cattle feeding company Cactus Feeders Inc and Argentina agribusiness Cresud SACIFya. Sales for the joint venture are expected to be in the range of US$30-35 million in 2007.

 

Though no financial details were disclosed, Tyson said it owns slightly more than half of the venture.

 

The venture would operate a cattle feedlot and a recently purchased beef processing plant.

 

Cactus and Cresud have operated the feedlot, located at Villa Mercedes in the province of San Luis, since 1999. It currently has a one-time capacity of 25,000 head, but the new venture has plans to expand its feedlot capacity in the region.

 

The beef plant, previously operated under the name of Exportaciones Agroindustriales Argentina S A, might be modified so that it could process up to 15,000 cattle per month from the current 9,500, Tyson said.

 

As part of the joint venture, much of the plant's production would be converted from grass-fed to grain-fed beef using cattle from the Cactus-Cresud feedlot. The higher quality product would provide increased access to important export markets in Asia, as well as the EU.

 

The plant already has approval to ship product to the EU, as well as other countries, and exports a majority of the mostly grass-fed, boxed beef it currently produces.

 

Argentina is the fifth largest producer of beef and veal in the world, after US, Brazil, the EU, and China, and is the no. 2 beef exporter in the world, the statement said.