SPRINGDALE, Ark., July 19 /PRNewswire-FirstCall/ -- In an effort to
increase the production of value-added products and enhance operating
efficiencies, Tyson Foods, Inc. (NYSE: TSN) has initiated improvement projects
at plants in Arkansas and Mississippi, the company announced today.
An expansion at Tyson's Russellville, Arkansas, poultry plant will
increase the company's processed chicken capacity, and enable the facility to
absorb the production of the company's plant in Bentonville, Arkansas.
Meanwhile, a project in Forest, Mississippi, will result in the
installation of several new chicken processing lines and other improvements,
and will enable the company to combine its two poultry plants there into one
facility by early 2006.
"These are major projects we believe will contribute to our goals to
increase value-added product sales and streamline our ability to produce and
deliver the high quality products our customers have come to expect," said
Bill Lovette, group vice president of Food Service for Tyson Foods.
Because these initiatives involve the closing of two plants, Tyson accrued
charges of approximately $10 million or $.02 per share in the third fiscal
quarter of 2005.
Russellville Expansion
The expansion project at Russellville will increase the plant's production
capacity by almost 60% and boost plant employment by approximately 165 people,
bringing the total workforce to more than 600 Team Members.
Meanwhile, Tyson's Bentonville plant, which was built in the 1960s and is
located in the middle of the city, is scheduled to cease operations October 1.
The 320 Team Members affected will be given the opportunity to apply for
openings at other Tyson locations.
"Given the age and location of this facility, we believe it makes more
sense to move production rather than invest more money in the plant," Lovette
said.
Tyson's Human Resources Department will work closely with affected
Bentonville Team Members to help them find other opportunities within the
company. This includes relocation assistance to those who transfer to a Tyson
facility outside of northwest Arkansas or a severance package for qualified
workers who decide to leave the company.
"Our Bentonville plant has served the company well over the years,"
Lovette said. "We appreciate the hard work of our Team Members at the
facility, as well as the long-running support we've received from the
community."
Tyson bought the Bentonville plant from Krispy Kitchens in 1972. Over the
years the facility has produced a wide variety of processed and cooked chicken
products and is currently making partially fried and raw breaded chicken
tenders, fillets, livers and gizzards for foodservice companies and restaurant
chains. The plant, which has been producing about one million pounds of
product per week, will be put up for sale.
Forest Investment
The improvements in Forest are being made at the former Choctaw Maid
plant, which the company acquired in 2003. The changes include more product
lines, which will enable the plant to increase its production of processed and
marinated chicken, as well as improvements in the plant's roofing, flooring
and refrigeration systems. Additional locker room space will also be
installed.
Once the project is completed early next year, Tyson will close the older
plant it operates on Cleveland Street in Forest and shift production and
workers to the newly upgraded facility.
"We believe our investment in Forest will generate long-term benefits for
the company, the community and our Team Members," said Lovette. "We're
essentially combining the best of both operations and will add new equipment
and other improvements that will result in a stronger, more efficient plant."
Tyson officials chose to upgrade the former Choctaw plant because it is
newer and provides room for growth. It opened approximately four years ago
and covers approximately 325,000 square feet. The plant Tyson will be
vacating began operations in 1957 and covers 140,000 square feet. The company
plans to sell the facility.
The former Choctaw plant currently employs 800 people, while the Cleveland
Street plant has approximately 900 Team Members. The consolidation of the two
facilities is expected to result in the elimination of more than
300 positions, however, because of normal attrition, layoffs may not be
necessary. Once improvements and the transfer of workers are completed early
next year, Tyson's newly consolidated plant is expected to have a workforce of
approximately 1,400 people.
"We'll do our best to communicate with Team Members at both facilities to
ensure the transition goes smoothly," Lovette said.
Area poultry producers who supply Tyson Foods should not be affected by
the change, since the consolidated plant will essentially handle the same
number of birds as the two existing plants do today. It should also not
affect the hatchery Tyson operates in the area.
The consolidated plant will produce the same types of products currently
manufactured by the existing operations. This includes fresh, frozen and
marinated cuts of de-boned and bone-in chicken as well as whole birds, which
are packaged and sold to retail and foodservice customers.
About Tyson Foods
Tyson Foods, Inc., founded in 1935 with headquarters in Springdale,
Arkansas, is the world's largest processor and marketer of chicken, beef, and
pork and the second-largest food company in the Fortune 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. Tyson has approximately 114,000 Team Members employed at more
than 300 facilities and offices in the United States and around the world.
Forward-Looking Statements
Certain statements contained in this communication are "forward-looking
statements" such as statements relating to the expected impact on Tyson's
earnings, and expected production capacity and employment levels due to plant
expansion. These forward-looking statements are subject to risks,
uncertainties and other factors, which could cause actual results to differ
materially from historical experience or from future results expressed or
implied by such forward-looking statements. Among the factors that may cause
actual results to differ materially from those expressed in, or implied by,
the 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) successful
rationalization of existing facilities, and the operating efficiencies of the
facilities; (vi) changes in the availability and relative costs of labor and
contract growers; (vii) issues related to food safety, including costs
resulting from product recalls, regulatory compliance and any related claims
or litigation; (viii) adverse results from litigation; (ix) risks associated
with leverage, including cost increases due to rising interest rates or
changes in debt ratings or outlook; (x) changes in regulations and laws (both
domestic and foreign), including changes in accounting standards,
environmental laws and occupational, health and safety laws; (xi) the ability
of the Company to make effective acquisitions, and successfully integrate
newly acquired businesses into existing operations; (xii) effectiveness of
advertising and marketing programs; and (xiii) the effect of, or changes in,
general economic conditions. The Company wishes to caution readers not to
place undue reliance on any forward-looking statements, which speak only as of
the date made. Tyson undertakes no obligation to publicly update any forward-
looking statements, whether as a result of new information, future events or
otherwise.
SOURCE Tyson Foods, Inc.
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Related links:
http://www.tyson.com
CONTACT:
media, Gary Mickelson, +1-479-290-6111, or
investors, Louis Gottsponer, +1-479-290-4826, both of Tyson
Foods, Inc.
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