Tyson elects board, plans poultry expansion in China

by Bryan Salvage
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SPRINGDALE, ARK. ― Tyson Foods Inc. plans to expand its poultry business in China through a joint venture with a Chinese poultry company, said Richard Bond, president and chief executive officer. Mr. Bond said Tyson has signed a deal to work with Jiangsu
Jinghai Poultry Industry Group Co. Ltd., a Chinese poultry breeding company, to raise and process chicken under the Tyson brand. Terms of the agreement were not disclosed, but Tyson will have a 70% ownership stake in the business.

Tyson and Jiangsu Jinghai will build a fully integrated poultry operation in Haiman City in the Jiangsu Province near Shanghai. The business will be called "Jiangsu Tyson Foods" and include development of live chicken operations and a chicken processing plant.

"Demand for high-quality, fresh chicken in China is growing faster than the existing domestic supply," Mr. Bond said. "We intend to help meet this need by becoming the first producer to deliver brand name, high-quality fresh chicken to consumers in the eastern China market."

The two companies plan to break ground for the processing plant as soon as Chinese government approvals are granted. Officials expect operations to begin in 2009.

"We believe Jinghai's extensive experience in poultry breeding will provide the foundation needed to successfully build a network of live poultry operations," said Rick Greubel, international president for Tyson. The joint venture will start by producing 400,000 birds per week with plans to eventually increase production to one million birds per week.

Products from the processing plant will be sold to retailers serving the Shanghai, Jiangsu and Zhejiang Provinces, which have a combined population of 139 million people.

Tyson already has a presence in China. The company has a joint venture poultry operation involved in producing further processed chicken, including chicken nuggets and popcorn chicken sold under the Tyson brand. Tyson also has part ownership in a pork processing plant in China.

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