November 14, 2007

 

China and Brazil purchases to help Tyson double international sales by 2010
 

 

Tyson Foods Inc. on Monday (14 November 2007) outlined an international strategy to more than double international sales from US$3 billion in 2007 to US$7 billion by 2010.

 

Tyson International President Rick Greubel said in Brazil, Tyson has signed a letter of intent to buy a mid-sized, vertically integrated poultry business and hopes to complete the deal by the end of calendar year 2007.

 

Tyson is also buying two joint-venture poultry operations in China, with both deals to be finalised by the end of fiscal 2008, which ends Sept. 29, 2008.

 

The company is also seeking ways to boost production in its Mexican processing operations and expand sales in Central America.

 

However, these moves are expected to have little effect on the company's 2008 results, the company said.

 

CEO Richard Bond said that to mitigate uncertainty and an expected US$300 million increase in grain costs in the chicken segment, the company has reined in costs and is pushing ahead on a heavier focus on higher-margin and value-added products.

 

The company is launching and testing nearly 200 new products from its research and development facility, the Discovery Centre, which opened earlier this year, Bond said.

 

Meanwhile the company will continue to raise prices on selected chicken products and introduce staggered increases on new foodservice and retail contracts.

 

Grain costs and a poor beef market are expected to hurt profits in 2008.

 

CEO Richard Bond described the beef market as "very difficult and volatile" during his announcement of  fourth quarter results.

 

Tyson expects the beef herd to expand by just 0.5 percent in 2008, when it should have been 1.5 to 2 percent in the cattle cycle.