September 19, 2008

 

Tyson to acquire three Brazilian poultry companies
    
 

Tyson Foods has signed purchase agreements with three vertically integrated poultry companies in southern Brazil in order to expand international sales growth.

 

Tyson will acquire Macedo Agroindustrial and Avícola Itaiópolis (Avita), both located in the state of Santa Catarina, and will initially have 70 percent ownership of Frangobrás in the state of Paraná. Tyson expects to conclude all three transactions in the next 60 days.

 

Terms of the planned Brazilian transactions were not disclosed.

 

Santa Catarina and Paraná are leading corn and soy-producing states in Brazil.  This is important since grain represents about half of the cost of raising a chicken. Both Brazilian states also have excellent access to major ports for exporting products.

 

Tyson's investment in these companies is a key part of its international strategy as Brazil is the world's leading chicken exporter and third largest chicken producer behind the US and China, according to Rick Greubal, group vice president and international president for Tyson.

 

The acquisitions will also give Tyson greater access to markets that are currently buying little or no poultry from the US, Greubal said.

 

Macedo, based in São José, is a retail chicken brand in southern Brazil. The company also exports chicken to countries that include the UK, Belgium, Spain, Hong Kong, Japan, South Africa and Yemen. As a result of the transaction, Tyson plans to expand production, more than doubling the plant's capacity to 176,000 birds per day. 

 

Avita and Frangobras are new poultry companies with growth potential. Both recently built new plants that contain modern processing technology. Avita, located in Itaiópolis, began operations in January 2008 and includes a network of contract poultry producers. The company's processing plant is involved in producing whole and cut-up frozen chicken primarily for the foodservice industry.

 

Frangobras, which is based in Campo Mourão and expects to start plant operations this month, relies on contract poultry producers. The poultry processing facility will also be involved in the production of whole and cut-up chicken for both foodservice and retail customers. Product from the two companies will be sold in the Brazilian domestic market as well as exported to several countries.

 

Tyson's investment in Avita and Frangobras will enable each processing facility to increase daily chicken production to 320,000 birds.

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