NEW YORK, Nov. 12, 2007 (PRIME NEWSWIRE) -- As part of ongoing efforts to meet growing world demand for protein, Tyson Foods, Inc. (NYSE:TSN) plans to expand the company's presence in South America, China and Mexico. Tyson's efforts to turn fat into fuel also continue to move forward, with the selection of a site in Louisiana for an alternative fuel production facility.
The international expansion and renewable fuel plans were reported today as part of presentations by six Tyson executives to analysts and investors at a meeting in New York City. The event, which was webcast, followed the company's quarterly earnings call.
INTERNATIONAL
Rick Greubel, group vice president and president of Tyson International, announced the company has set a goal of increasing international sales from $3 billion in fiscal 2007 to $5 billion by 2010. Expanding and establishing operations in other countries will be a key to achieving this objective.
Greubel reported the company has signed a letter of intent to buy a mid-size, vertically integrated poultry business in Brazil. While details, including the name of the company, have not been released, company officials hope to complete the acquisition before the end of calendar 2007.
Tyson has also reached preliminary agreements for two joint venture poultry operations in China. While specific details were not shared, Greubel indicated both ventures are currently expected to be completed in fiscal year 2008 and will help make Tyson one of the first companies in China to offer a full line of poultry products.
Expansion of Tyson de Mexico, the Mexican poultry subsidiary of Tyson Foods, is another ongoing objective. The company is exploring ways to significantly increase production at its chicken processing operations in Mexico and also expand sales to customers in the region, including those in Central America.
"Our global strategy is to target countries where we see the consumption of protein growing rapidly," said Greubel. "This includes gaining access to new markets, as well as expanding business with our existing international customers."
Tyson already has joint venture poultry and pork operations in China and, through Tyson de Mexico, is one of the largest producers of value-added chicken for retail and foodservice customers in Mexico. Earlier this year, the company announced the formation of a vertically integrated beef operation in Argentina with two other companies. In addition, Tyson operates a cattle feedlot and beef processing plant in Alberta, Canada.
RENEWABLE ENERGY
Tyson Foods also continues to take strategic steps in its quest to be a premier player in renewable energy. Dynamic Fuels LLC, a company created by Tyson and Syntroleum Corporation (Nasdaq:SYNM) of Tulsa, has selected an existing industrial site in Louisiana to build a plant to produce synthetic fuels from renewable feedstocks such as animal fat and grease. The specific location has not yet been disclosed.
Construction is expected to start in 2008 with completion set for early 2010. The project, which will cost up to $150 million, will generate approximately 250 short-term construction jobs and 65 highly skilled permanent jobs.
"After extensive review of potential sites, we selected an existing industrial site in Louisiana because it's near the needed supply of feedstock and hydrogen, has an excellent transportation infrastructure, and also because of the strong support of state and local leaders," said Jeff Webster, senior vice president, Tyson Renewable Products Division. "The selection represents another exciting step forward in our strategy of leveraging Tyson's access to animal by-products, our trading skills, and industry relationships to become a premier player in renewable energy."
Once fully operational, the facility is expected to produce 75 million gallons of fuel a year from animal fats, greases and vegetable oils supplied by Tyson. The unblended fuel can be used as a premium fuel in existing diesel engines with no engine modifications required and can also be upgraded into ultra-clean, high quality synthetic jet fuel.
Tyson and ConocoPhillips (NYSE:COP) also continue to move forward with plans to convert animal fats into renewable diesel fuel. Capital investment for phase one, testing protocols and the establishment of pre-processing conditions, are complete and production is currently expected to start in December. Tyson will initially provide beef tallow from its Amarillo, Texas, beef complex to the ConocoPhillips refinery in nearby Borger, Texas.
OTHER PRESENTATIONS
Other Tyson executives who gave presentations included the following:
* Bernard Leonard, group vice president of Food Service, highlighted Tyson's efforts to collaborate with customers on new product creation through the company's new Discovery Center. Since February, nearly 500 foodservice customers have visited the new food research and development facility, resulting in more than 40 new products/concepts that are either being tested or have been launched. Leonard also reported the successful conversion of all Tyson marinated and non-marinated, uncooked, foodservice chicken to 100% All Natural labeling and formula. * Scott McNair, group vice president of Consumer Products, addressed his group's use of the Discovery Center, as well as overall efforts to create meal solutions that are convenient, fast, fresh, and homemade. Examples of the company's success have included the introduction of Tyson's 100% All Natural(tm), Raised Without Antibiotics(tm) fresh chicken and the launch of a new retail line of restaurant-style frozen snacks called Tyson(r) Any'tizers(tm). To help consumers be recognized as "mealtime heroes," Tyson has also launched a new advertising and promotion plan titled "Thank You, Mom." * Jim Lochner, senior group vice president of Tyson Fresh Meats, talked about the "great turnaround" in the company's beef business in fiscal 2007, as well as the gains experienced in pork. He indicated plans are in place for continued improvement in fiscal 2008. For example, the company has split the management of its beef and pork operations to allow for more attention to the details affecting operating margins. * Wade Miquelon, chief financial officer, provided an update on efforts to improve the efficiency and flexibility of the company's business structure through an initiative called FAST (Focus, Agility, Simplify and Trust). The resulting changes, which are currently being implemented, include modifying or reducing some layers of management and giving Team Members more decision-making authority.
ABOUT TYSON
Tyson Foods, Inc. (NYSE:TSN), founded in 1935 with headquarters in Springdale, Arkansas, is the world's largest processor and marketer of chicken, beef, and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. The company produces a wide variety of protein-based and prepared food products and is the recognized market leader in the retail and foodservice markets it serves. Tyson provides products and service to customers throughout the United States and more than 80 countries. The company has approximately 104,000 Team Members employed at more than 300 facilities and offices in the United States and around the world. Through its Core Values, Code of Conduct and Team Member Bill of Rights, Tyson strives to operate with integrity and trust and is committed to creating value for its shareholders, customers and Team Members. The company also strives to be faith-friendly, provide a safe work environment and serve as stewards of the animals, land and environment entrusted to it.
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FORWARD-LOOKING STATEMENTS
Certain information contained in the press release may constitute forward-looking statements, such as statements relating to potential expansion or establishment of operations in South America, China and Mexico and plans for a renewable fuels plant. These forward-looking statements are subject to a number of factors and uncertainties which could cause the company's actual results and experiences to differ materially from the anticipated results and expectations, expressed in such forward-looking statements. The company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Among the factors that may cause actual results and experiences to differ from the anticipated results and expectations expressed in such forward-looking statements are the following: (i) fluctuations in the cost and availability of inputs and raw materials, such as live cattle, live swine, or feed grains (including corn), and energy; (ii) the company's ability to realize anticipated savings from its cost reduction initiatives; (iii) market conditions for finished products, including competition from other global and domestic food processors, the supply and pricing of alternative proteins, and the demand for alternative proteins; (iv) risks associated with effectively evaluating derivatives and hedging activities; (v) access to foreign markets together with foreign economic conditions, including currency fluctuations, and import/export restrictions and foreign politics; (vi) outbreak of a livestock disease (such as avian influenza (AI) or bovine spongiform encephalopathy (BSE)) which could have an effect on livestock owned by the company, the availability of livestock for purchase by the company, consumer perception of certain protein products or the company's ability to access certain domestic and foreign markets; (vii) successful rationalization of existing facilities, and the operating efficiencies of the facilities; (viii) changes in the availability and relative costs of labor and contract growers, and the ability of the company to maintain good relationships with employees, labor unions, contract growers and independent producers providing livestock to the company; (ix) issues related to food safety, including costs resulting from product recalls, regulatory compliance and any related claims or litigation; (x) changes in consumer preference and diets, and the company's ability to identify and react to consumer trends; (xi) significant marketing plan changes by large customers, or the loss of one or more large customers; (xii) adverse results from litigation; (xiii) risks associated with leverage, including cost increases due to rising interest rates or changes in debt ratings or outlook; (xiv) changes in regulations and laws (both domestic and foreign), including changes in accounting standards, tax laws, environmental laws and occupational, health and safety laws; (xv) the ability of the company to make effective acquisitions and successfully integrate newly acquired businesses into existing operations; (xvi) effectiveness of advertising and marketing programs; (xvii) the results of the Company's on-going tax account balance review; and (xviii) the effect of, or changes in, general economic conditions.