According to unidentified sources cited by Reuters, Tyson Foods, the U.S. meat giant, plans to sell its China poultry business. The company has hired investment bank Goldman Sachs to advise on the sale and sent preliminary information to potential buyers including a number of private equity firms. The sale process is currently at its early stage, whose valuation remains undisclosed.1
Entering the Chinese market in 2001, Tyson Foods China is headquartered in Shanghai. Its business scope covers poultry breeding, slaughtering, processing and sales, providing chicken, pork, beef and processed foods. As stated on Tyson Foods' Chinese website, the company has four research and development centers, four large industrial chain base layouts, three smart factories in operation, and dozens of breeding farms in China.2 While Tyson Foods did not disclose sales in China in its 2022 annual report, it is estimated that the annual sales of Tyson Foods' China poultry business is around USD 1.1 billion.1 The specific reasons behind Tyson Foods' decision to sell its China business have not been disclosed.
The Latest Launched Tyson Nantong Smart Factory in the eastern Chinese City of Nantong
Impacted by the declining chicken and pork prices, as well as the sluggish demand for beef products, Tyson Foods has fallen short of Wall Street's expectations for revenue and profit. As per Tyson Foods' most recent third-quarter financial report for the fiscal year 2023, its revenue for the third quarter totaled USD 13.1 billion, down 3% from the previous year. Adjusted operating profit stood at USD 179 million, a slump of 82% over the same period. In the first nine months of the fiscal 2023, the operating profit plummeted by 98% year-on-year to USD 68 million. 3
Tyson Foods Chicken Products on sale in US grocery store
Responding to these challenges, Tyson Foods has undertaken measures to curtail costs, including workforce reductions, factory closures, and operational overhauls. In March, the company announced the closure of two plants in Arkansas and Virginia, with over 1,600 headcounts impacted.4 Early in August, Tyson Foods further confirmed the closure of an additional four U.S. poultry plants—two in Missouri, one in Arkansas and one in Indiana—as part of its ongoing efforts to reduce costs and improve capacity utilization.
The Tyson Processing Plant in Glen Allen, Virginia
**Disclaimer: All images used in this article are from the internet.
