Tyson Foods Enters Brazilian Poultry Industry; Three transactions part of company’s international growth strategy
São Paulo, Brazil – September 18, 2008 – Tyson Foods, Inc. (NYSE: TSN), the world’s largest meat and poultry processor, is continuing the strategic expansion of its international business by investing in the Brazilian poultry industry, the company announced today.
Arkansas-based Tyson has signed purchase agreements with three poultry companies in southern Brazil. Each is vertically integrated and offers the potential for domestic and international sales growth.
Terms of the planned Brazilian transactions were not disclosed, however, company officials confirmed Tyson will acquire Macedo Agroindustrial and Avícola Itaiópolis (Avita), both located in the state of Santa Catarina, and will initially have 70% ownership of Frangobrás in the state of Paraná. Tyson expects to conclude all three transactions in the next 60 days.
Santa Catarina and Paraná are leading corn and soy-producing states in Brazil. This is important since grain represents about half of the cost of raising a chicken. Both Brazilian states also have excellent access to major ports for exporting products.
“Our investment in these companies is a key part of our international strategy, especially since Brazil is currently the world’s leading chicken exporter and third largest chicken producer behind the U.S. and China,” said Rick Greubel, group vice president and international president for Tyson Foods, which had sales of USD $26.9 billion in fiscal 2007, with chicken sales representing 31 percent of the total.
“The Brazilian population consumes about 37 kilos (81 pounds) of chicken per person per year compared to 45 kilos (99 pounds) in the U.S.,” he said. “With the economic stability and a growing middle class, the per capita consumption of chicken will continue to increase in Brazil. In addition, our Brazilian operations will give us greater access to markets that are currently buying little to no poultry from the U.S.”