Tyson Foods to sell two poultry plants to Koch Foods
March 22, 2007
by Keith Nunes
SPRINGDALE, ARK. — Tyson Foods, Inc. signed a letter of intent to sell two poultry plants in Ashland and Gadsden, Ala., to Koch Foods Inc., Park Ridge, Ill. The sale also will include a feed mill in Talladega and hatcheries in Fair Knoll and Empire. Terms of the agreement were not released.
"Since both the Ashland and Gadsden plants are involved in the production of commodity chicken products and Tyson has become more focused on value-added chicken production, we believe it makes sense to sell these operations," said Bill Lovette, senior group vice-president of poultry and prepared foods for Tyson.
According to the company, managers began reassessing operations in Alabama after a fire destroyed a processing plant in Heflin. The reassessment led to a discussion with Koch, who has been the primary customer of the Heflin and Ashland plants.
In July, Tyson Foods announced a $200 million cost-cutting initiative designed to return the company to profitability. The initiative involved reductions in production, workforce and a shedding of some assets.