Tyson execs outline competitive structure

by Meat&Poultry Staff
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NEW YORK - A strong balance sheet and options for future international expansion has positioned Tyson Foods as a strong competitor in the meat and poultry industry, according to Donnie Smith, president and chief executive officer of Tyson Foods.

Speaking at the Goldman Sachs 16th Annual Agricultural Biotech Forum, Smith discussed the company's potential growth strategies.

"It gives us options," Smith said, "and that includes building out our foreign operations. We're establishing company-owned chicken farms in China to supply our three plants, and we're also double-shifting our plants in Brazil. Domestically, we'll use our capital to grow our prepared foods business, and that could mean building or buying, depending on our needs and the opportunities available. We'll continue reinvesting in our business, which has put us in a great competitive position. We also will maintain our focus on product innovation and adding value to chicken as we help our customers grow their businesses."

Noel White, senior group vice president of Tyson's fresh meats division, said the company's pork margins should remain strong while its beef margins should recover from shrinking margins. Also, locating Tyson's beef processing plants in regions with the highest concentration of fed cattle further contributes to the company's competitive position.

"We originally expected to see a 1-2 percent decrease in available cattle in 2012, but because fewer head were processed during this recent period of margin compression, we anticipate the availability of fed steers and heifers to be adequate or even greater for the balance of our fiscal year," he said.

White added that Tyson's beef processing plants are located in the regions with the highest concentrations of fed cattle, which contributes to the company's competitive cost structure.

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