Tyson bullish on business model

Tyson bullish on business model

Tyson Foods management has insisted that the food group's business model is ahead of its peers in the protein market, meaning that it is well-positioned to deal with rising feed costs.

Speaking during a conference call following the release of its first-half numbers, Tyson Foods management remained upbeat in the face of rising input costs and pressures on demand in the US.

"Tyson is facing challenging markets and rising inputs but it is important to put this in context of global protein markets," president and CEO Donnie Smith said.

Stable demand, limited supply globally and lower imports into the US mean that the group will be able to continue to push through price increases, Smith suggested.

Smith added that Tyson's diversified business model means that it is well-positioned to continue to deliver profits in line with last year's levels.

"We have a multi-protein model. We are in all three proteins, plus our prepared foods model. We also go to market in multiple channels. We are multinational and, although our international businesses by and large are start ups, that paints a picture of force in the future. We have a very diverse business model within each of the proteins and those business models each have a commodity and/or a value added component," Smith said.

Tyson management argued that the company is in a better position than many of its peers to continue to deliver a strong performance, even in challenging market conditions.

"No competitor has our product diversification. We have unparalleled resources - our team and our discovery centre - to create value for our customers throug product innovation. We have had great cash flow over past 24 months and that has allowed us to strengthen our balance sheet... and invest in the business," Smith said.