SPRINGDALE, Ark., Jan. 13 /PRNewswire-FirstCall/ -- Tyson Foods, Inc.
(NYSE: TSN) is continuing its strategy of investment and growth in the
processed meats business by increasing its position as one of the nation's
leading manufacturers of bacon, company officials reported today.
Tyson plans to spend more than $30 million to add bacon production at its
plant in Cherokee, Iowa. Bacon operations at the facility are currently
scheduled to begin by late summer 2006 and will complement production at the
company's existing bacon plants in Omaha, Nebraska and Vernon, Texas.
"We're making this investment to help meet continued, strong demand for
refrigerated and pre-cooked bacon," said Bill Lovette, senior group vice
president of Poultry and Prepared Foods. "The project is another example of
the technology and food safety improvements we've initiated to position our
processed meats business for future growth. For example, we've invested
almost $15 million in our deli meats plant in Buffalo, New York, over the past
two years."
Because of the move to bacon production, ham operations at Cherokee will
be shifted to Tyson facilities in Concordia, Missouri, and Buffalo. This will
temporarily reduce Cherokee's workforce of 650 by more than 50 positions over
the next few months. However, the company expects to add approximately 70
jobs when bacon production begins later this year.
"While the changes will temporarily mean fewer jobs, our investment will
restore positions and help strengthen the plant's future," Lovette said.
The employment status of temporarily displaced workers at Cherokee will be
the subject of discussions with United Food and Commercial Workers Local 179.
The company currently expects to invite them back to work after installation
of the new bacon operation is completed. In addition to ham, the Cherokee
plant makes deli meats, Canadian bacon and hot dogs.
Tyson's efforts to enhance its processed meats business also include
discontinuing operations at two facilities in northeast Iowa. The
Independence and Oelwein plants, which produce chopped ham and sliced luncheon
meats, will close effective March 17, while the company's other processed
meats operations will continue to receive the benefit of reinvestment for
future growth.
"Closing the Independence and Oelwein plants is a tough decision because
it affects the lives of nearly 400 Team Members and their families, as well as
two great plant communities," said Lovette. "However, given the age of these
plants and capital improvements needed to supply our future product mix and
customer needs, it's economically unfeasible to keep them open."
The Independence facility employs 300 Team Members, covers 126,000 square
feet and has been in operation for more than 50 years. The Oelwein facility
employs 90 Team Members, covers 43,000 square feet and has been in operation
for 40 years. Equipment from the plants will be removed and either sold or
used at other Tyson locations. The two plants and related property will be
offered for sale.
Team Members affected by the closings will be encouraged to apply for
openings at other Tyson locations, including the company's nearby pork complex
in Waterloo. Qualified workers will also have the option of accepting a
severance package from the company.
"We thank our Team Members for their hard work and support of these
plants," Lovette said. "We'll do our best to help them as they seek other
employment at another Tyson location or with other employers in the area."
The company plans to host a job fair for affected workers.
The more efficient use of other processed meat facilities, including
Concordia and Buffalo, together with reduced costs from the facility closures
are estimated to generate annual pre-tax cost savings of approximately $15 to
$20 million, a portion of which is estimated to be generated in the last six
months of the current fiscal year. The facility closings are expected to
result in a charge to Tyson's second quarter earnings of approximately $16
million or $0.03 per share.
Tyson has similar processed meats operations in Concordia, Missouri;
Buffalo, New York; Ponca City, Oklahoma and Houston, Texas.
Tyson Foods, Inc., 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 114,000 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
The Company and its representatives may from time to time make written or
oral forward-looking statements, such as statements relating to the expected
impact on Tyson's current and future earnings and the anticipated completion
of plant modifications at Cherokee. 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
raw materials, such as live cattle, live swine or feed grains; (ii) market
conditions for finished products, including the supply and pricing of
alternative proteins, and the demand for alternative proteins; (iii) risks
associated with effectively evaluating derivatives and hedging activities;
(iv) access to foreign markets together with foreign economic conditions,
including currency fluctuations and import/export restrictions; (v) 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, or the
Company's ability to access certain markets; (vi) successful rationalization
of existing facilities, and the operating efficiencies of the facilities;
(vii) changes in the availability and relative costs of labor and contract
growers; (viii) issues related to food safety, including costs resulting from
product recalls, regulatory compliance and any related claims or litigation;
(ix) adverse results from litigation; (x) risks associated with leverage,
including cost increases due to rising interest rates or changes in debt
ratings or outlook; (xi) changes in regulations and laws (both domestic and
foreign), including changes in accounting standards, environmental laws and
occupational, health and safety laws; (xii) the ability of the Company to make
effective acquisitions, and successfully integrate newly acquired businesses
into existing operations; (xiii) effectiveness of advertising and marketing
programs; and (xiv) the effect of, or changes in, general economic conditions.
SOURCE Tyson Foods, Inc.
 back to top
Related links:
http://www.tyson.com
CONTACT:
media, Gary Mickelson, +1-479-290-6111, or
investors, Ruth Ann Wisener, +1-479-290-4235, both of Tyson
Foods, Inc.
|
