February 4, 2008

Tyson pulls plug on pork negotiations with Chinese company

CEO of Tyson Foods Inc, Richard Bond, has told Reuters that it is not in talks to sell pork to China. However, the company has entered into a venture with a Chinese poultry firm.

This statement is in contrary to reports after a company conference call on last Monday (January 28, 2008), in which Bond said China is potentially an export destination for Tyson's pork.

According to Bond, a key reason for not entering the Chinese market is due to the fact that China is unwilling to pay more for ractopamine-free pork. Ractopamine is a common food additive used widely in the US to increase lean meat production of pigs.

Bond said Tyson did talk to COFCO, China's largest oil and food importer, about pork. However, he added that a deal is not in sight and will not be in the foreseeable future.

Although Tyson has not succeeded with the pork deal, but it has signed a deal for a joint venture with Jiangsu Jinghai Poultry Industry Group, a Chinese poultry production company, to raise and process chickens under Tyson brand for sale to consumers in eastern China.

Tyson confirmed the joint venture on Friday (February 1, 2008), but did not provide any details except that it will have a 70 percent of ownership shares in the business.

Tyson said the venture, to be called Jiangsu Tyson Foods, is expected to start operations in 2009. The venture is currently waiting for Chinese government approvals.