US food giant Tyson Foods said it will invest in its chicken business as it focuses on becoming “increasingly more competitive”.
Speaking at the firm’s earnings conference today (10 May), Donnie Smith, president and CEO told analysts that a “good part” of its investment will be in improving its domestic chicken processing.
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“We’re not pleased with our own performance yet and we have a poultry team that has their head down working very hard,” Smith said. “We’re adding a fair amount of process improvements at our plants with capex in domestic chicken, we’re adding mix flexibility, we’re adding labour efficiency and we’re adding a variety of projects throughout the whole domestic chicken segment.
“Rather than be specific plant by plant, I can assure you that a good part of our capex is flowing into domestic chicken for process improvements,” he added.
Tyson this morning reported a return to a first-half profit as a tightening of meat supplies boosted prices for the company’s beef, pork and chicken.
For the six months ended 3 April, the firm earned US$315m compared to a loss of $223m in the prior year.
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By GlobalDataRevenues edged up to $13.55bn from $12.82bn last year, while operating profit reached $658m compared to a loss of $169m in the prior year.
Smith told analysts today that its focus now is to become “increasingly more competitive”.
“We’re very pleased with our continuous improvement and our goals are very lofty as we try and become more competitive,” Smith said. “Our goals is to get as many plants as possible. We’ve got plants where we’ve got a lot of work to do, but that is the genesis behind putting capex improvement in and some of that will take time to materialise. We’re very comfortable with our progress.”
He added: “As we grow, we will look at our forward demand and we’ll determine the inventory levels necessary to meet those demands…which may mean adding to our production base. I’m really confident we have the right plans in place…we’ve got the capital available to us to keep investing in our business and to make the improvements we need to compete to be the best in the industry.”
