Tyson Foods' multi-protein business model the right approach because its four operating segments -- chicken, beef, pork and prepared foods -- don't need to provide normalized returns simultaneously for company to be successful, company executive says
March 27, 2012
– Donnie King, senior group vice president of poultry and prepared foods for Tyson Foods, Inc. (NYSE:TSN - News), today told investors at the JPMorgan 2012 Global Protein Conference that its multi-protein business model is the right approach because the four operating segments -- Chicken, Beef, Pork and Prepared Foods -- need not provide normalized returns all at the same time for the company to be successful.
"Although there's variability, and sometimes volatility, among the segments, the total company operating margin has remained solid under the current management team," King said. "It's good when all four segments are within their normalized ranges, but it isn't a requirement in order for our company to perform well as a whole."
King said Tyson's Chicken segment provided positive earnings last year during extremely difficult market conditions due to on-going operational improvements.
"Since 2008 through 2011, we've achieved $800 million in operational efficiencies, and we're on track to achieve an incremental $125 million this fiscal year," King said. "We generated positive earnings in fiscal '11, which was possibly the worst year in chicken industry history."
King emphasized that protein industry fundamentals are lining up well as supplies have declined while international demand for meat and poultry continues to grow, which has led to improved pricing.
About Tyson Foods
Tyson Foods, Inc. (NYSE:TSN - News), founded in 1935 with headquarters in Springdale, Arkansas, is one of the world's largest processors and marketers of chicken, beef and pork, the second-largest food production 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 and is the recognized market leader in the retail and foodservice markets it serves. Tyson provides products and services to customers throughout the United States and more than 130 countries. The company has approximately 115,000 Team Members employed at more than 400 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.
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