SPRINGDALE, Ark., Sept. 10, 2008 (GLOBE NEWSWIRE) -- As part of its continuing international expansion, Tyson Foods, Inc. (NYSE:TSN) has finalized a joint venture agreement involving vertically integrated poultry operations in eastern China, company officials reported today.
The agreement is with the Shandong Xinchang Group, one of China's leading poultry producers with estimated 2009 sales of U.S. $345 million. Once the deal receives the necessary government approvals, it will give Tyson 60% ownership in vertically-integrated poultry operations consisting of Xinchang's existing assets and include the acquisition of a new poultry processing complex on the east coast of the Shandong Province. The name of the venture will be Shandong Tyson Xinchang Foods Company, Ltd.
"Poultry is the second leading meat protein source in China behind pork and continues to make significant gains in consumption," said Rick Greubel, group vice president and international president for Tyson Foods. "This joint venture will enable us to help meet China's appetite for poultry, which has been growing faster than the existing domestic supply."
Xinchang's business includes chicken and duck breeder and broiler farms, feed mills, and hatcheries. With the addition of a new chicken processing complex, the business also consists of four chicken processing facilities with a maximum capacity of three million birds per week and a duck processing facility capable of handling of 350,000 birds per week.
Most of the chicken and duck products are sold frozen through foodservice and wholesale channels. A small percentage is sold through retail outlets under the Xinchang brand and under private label. In addition, some is exported. A majority of the sales are to customers in the region surrounding the Shandong province, which includes the cities of Beijing and Shanghai.
"It's our intent to expand the production and sales of these operations and use our extensive experience in the food industry to serve the rapidly growing quick service restaurant and modern retail food business in China," Greubel said.
This will be Tyson's third joint venture poultry operation in China. The company also has majority interest in a chicken further processing facility in Zhucheng, Shandong, and majority interest in a vertically integrated poultry operation being developed in Haimen City in the Jiangsu Province near Shanghai.
China represented 9% of the $3.8 billion Tyson generated in international sales in fiscal 2007.
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 the expected expansion of production and sales by the joint venture. 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.