Strategy Involves Closing Boise Plant; Eliminating Pasco Shift
SPRINGDALE, Ark., Aug. 17 /PRNewswire-FirstCall/ -- Tyson Foods, Inc.
(NYSE: TSN) is consolidating its beef plants in the Pacific Northwest as
part of a comprehensive plan to operate its fresh meats business more
efficiently, the company announced today.
Effective October 16, 2006, Tyson Fresh Meats, Inc., a subsidiary of
Tyson Foods, will permanently close its beef slaughter plant in Boise,
Idaho, and scale back processing operations at its Pasco, Washington,
complex. The Pasco plant has historically operated one shift of beef
slaughter and two shifts of beef processing. After October 16, 2006, Pasco
will continue to operate one slaughter shift; however, because the plant
will no longer be receiving beef carcasses from Boise, it will operate only
one processing shift instead of two.
"This consolidation is part of a much broader strategy designed to
return Tyson Foods to profitability, while positioning our business for
long-term success by ensuring our operations are cost-effective," said
Richard L. Bond, president and CEO of Tyson Foods. "In addition to cost
savings, we also remain focused on creating product demand, improving
product mix and achieving maximum price for the high quality foods we
produce."
The changes involving Boise and Pasco are also part of an initiative
aimed at improving the performance of Tyson's beef and pork business. As a
result of this initiative, Tyson consolidated beef plants in northeast
Nebraska earlier this year, continues to improve production line and
staffing efficiency at other plants and has been simplifying and
streamlining its beef and pork product mix.
"The Boise plant has performed reasonably well for many years, however,
market and economic conditions have changed," said Jim Lochner, Tyson
senior group vice president. "There's more beef slaughter capacity than
available cattle, while the cost of transporting beef carcasses from Boise
to Pasco for processing has increased significantly.
The closing of the Boise plant means the elimination of beef slaughter
capacity of 1,600 cattle per day or approximately 470,000 cattle a year. It
also results in the elimination of all 270 jobs at Boise and approximately
500 positions at Pasco. This will reduce the total workforce at Pasco to
about 1,200 Team Members.
"While it's always difficult to eliminate operations and jobs, we
believe it makes economic sense to take these steps," Lochner said. "These
steps are expected to result in a more efficient use of Pasco's production
capacity because more cattle should be available for slaughter at the
facility." Tyson will continue to buy cattle in the Boise region for
slaughter at Pasco. Company officials expect the closing of the Boise plant
to increase Pasco's beef slaughter capacity utilization by four to five
percent.
Affected Boise and Pasco Team Members will be encouraged to apply for
openings at other Tyson locations. The company will offer cash relocation
incentives to workers willing to move to select Tyson plants in the
Midwest. In addition, the company will work cooperatively with state
workforce development officials who will provide employment assistance.
Much of the production equipment and cooling components will be removed
from the Boise plant for use at other Tyson facilities. Company officials
expect to explore the sale of the property, which includes approximately
1,500 acres, for possible use by real estate developers. Due to the
estimated fair market value of the Boise property the company does not
anticipate incurring any charges as a result of the Boise closure.
The Boise plant has been part of Tyson Foods since September 2001, when
the company acquired IBP, inc. IBP had owned the plant since 1976.
In addition to Pasco, Tyson operates domestic beef plants in Denison,
Iowa; Joslin, Illinois; Emporia and Finney County, Kansas; Dakota City and
Lexington, Nebraska; and Amarillo, Texas. The company also owns Lakeside
Packers, a beef complex in Brooks, Alberta.
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 expected
efficiencies, capacity utilization and position elimination. 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, 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; and (xvii) the effect of, or changes in, general
economic conditions.
SOURCE Tyson Foods, Inc.
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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.
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