Tyson Foods, Cactus Feeders form j.v. in Argentina
January 12, 2007
by Keith Nunes
SANTA ROSA, ARGENTINA — Tyson Foods, Inc. has formed a joint venture with Cactus Feeders Inc. and Cresud S.A.C.I.F. y A., an Argentinean agribusiness company, to create a vertically integrated beef operation in the South American country. The joint venture will use an existing feedlot operated by Cactus and Cresud to supply most of the beef for a beef slaughter and processing plant recently purchased by the joint venture. Sales for the joint venture are expected to be in the range of $30 million to $35 million in 2007, according to Tyson Foods, and it will give the company access to certain Asian and European markets.
Cactus and Cresud have operated the feedlot, located at Villa Mercedes in the province of San Luis, since 1999. It currently has a one time capacity of 25,000 head, but the new venture may expand the feedlot capacity. The boxed beef plant, previously operated under the name Exportaciones Agroindustriales Argentinas S.A., is located in Santa Rosa in the province of La Pampa. It is Tyson’s first participation in a beef operation outside of North America.
Argentina is the fifth leading producer of beef and veal in the world, after the U.S., Brazil, the European Union and China, and is the second leading exporter of beef.
"At Tyson, we are excited to join two great business partners in Cactus Feeders and Cresud," said Rick Greubel, group vice-president of international for Tyson Foods. "We believe our combined expertise will create a great new company that will be able to produce products for domestic consumption as well as export. Cresud’s involvement in grain and livestock production, the experience of Cactus in the feedlot business and Tyson’s success in processing and marketing beef will help capitalize on the strengths of Argentina’s beef industry. This is also an important first step for Tyson as we look to create a presence in South America."
During a conference call with financial analysts in late November, Mr. Greubel said the company expected to complete two joint venture transactions in South America in early 2007. One involved the beef operation in Argentina and the other involves a poultry operation in Brazil and has not been announced yet. The company also is working on a joint venture with a poultry company in China.