NEW YORK, Nov. 13, 2006 (PRIMEZONE) -- Efforts to generate additional revenue for Tyson Foods (NYSE:TSN) include more rapid product development, new joint ventures in South America and China and the creation of a new renewable energy division, Tyson business unit leaders said Monday.
Eight senior executives from Tyson made presentations to analysts and investors at a special luncheon in New York City. The event, which was webcast, followed the company's quarterly earnings call.
"This is an opportunity for analysts and investors who follow our stock to meet key members of our management team and learn more about the steps we're taking to transform Tyson into an even more competitive, successful company," said Tyson CEO Richard L. Bond.
The audience was updated on Tyson's plans to open a new, state-of-the-art research and development facility, which is expected to boost the speed and efficiency of new product development by the company. According to Wendy Davidson of Tyson Food Service, "Our new Discovery Center will help bring new market-leading retail and food service products to life faster and more effectively."
The new facility, which will open early 2007 in Springdale, Arkansas, "will quite simply be the best food R&D facility in the world," she said, noting it will include 19 research kitchens as well as a USDA-inspected pilot plant.
The international market continues to provide growth opportunities for Tyson Foods. "World population growth and dietary changes will drive increased meat consumption over the next 25 years, as more people in developing countries trade starch-based foods for protein," said Rick Greubel of Tyson International. "To capitalize on this growth, we will continue to expand our export business and we'll also establish more operations in other countries."
Tyson officials expect to complete two joint venture transactions in South America in early 2007. One involves a poultry operation in Brazil and the other a beef operation in Argentina. The company is also working on a joint venture with a poultry company in China. Company officials expect to close on this transaction in fiscal 2007.
Renewable energy is another area expected to add to Tyson's bottom line in future years. A cross functional team, lead by Tyson Corporate Strategy and Development, has been exploring ways to commercialize the company's vast supply of animal fat into biofuels. This work has resulted in the creation of a new business unit called Tyson Renewable Energy, which is expected to move forward on initiatives to produce these biofuels. The new unit is also examining the potential use of poultry litter to generate energy and other products.
"The charter of the Division is consistent with our 'value-up strategy,' since it's focused on increasing margins on our by-products," according to Jeff Webster of Tyson Corporate Strategy and Development. "It also supports our core value of environmental stewardship. Since using these by-products as fuel replaces the use of hydrocarbons, net carbon emissions will decrease and that's good for the environment."
Other Tyson executives who gave presentations included the following:
-- Bill Lovette, Tyson Poultry and Prepared Foods, emphasized the
expansion of value-added sales through innovation, such as the
development of more convenience-oriented chicken, beef and pork
products. He also described Tyson's efforts to leverage its raw
material base, supply chain and distribution assets to deliver
more value to the marketplace. For example, the company is using
a greater percentage of its own pork bellies to produce bacon.
-- Rob DeMartini, Tyson Consumer Products, explained how Tyson is
meeting consumer demand for fresh, convenient and home-made food
solutions through the marketing of such items as fresh meat meal
kits, pre-cooked dinner meats and oven roasted chicken. He also
noted how Tyson products are positioned throughout the retail
store, from the traditional meat case and processed meats section,
to frozen foods, shelf stable product aisle and deli meat area.
-- Jim Lochner, Tyson Fresh Meats and Margin Optimization, talked
about Tyson's Commodity Trading and Risk Management Group and its
efforts to mitigate the price risks associated with the feed
ingredient, energy and commodity meat markets.
-- Noel White, Tyson Fresh Meats, highlighted the progress made by
the company's beef and pork business to reduce costs, while
increasing the yields and revenues. Plant consolidation and other
measures have helped the business unit enhance operational
efficiency, while pricing and value added initiatives are
improving revenues.
-- Bernard Leonard, Tyson Food Service, joined Wendy Davidson in
outlining strategic plans to improve the profitability and growth
of the company's core food service business. He indicated this
involves expanding products and services with some of the
company's major customers and by giving customers the option of
"natural" meat and poultry products.
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 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, which are marketed under the "Powered by Tyson(tm)" strategy. Tyson is the recognized market leader in the retail and foodservice markets it serves, providing products and service to customers throughout the United States and more than 80 countries. The company has approximately 110,000 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.
Forward-Looking Statements
Certain information contained in the press release may constitute forward-looking statements, such as statements relating to the opening and effectiveness of the "Discovery Center," joint ventures in South America and China and other international expansion, and the company's future involvement and profitability from the production of biofuels. 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.