The new CEO at Tyson Foods Inc. Richard L Bond has outlined the steps required for the company to create long-term value for its shareholders, and reported further on the measures taken over the past 20 months to return the company to profitability.
Bond, who was promoted to the position of CEO in May, was joined by the Arkansas-based meat processor’s chief financial officer Wade Miquelon at the Prudential Equity Group’s Annual Back-to-School Consumer Conference in Boston yesterday (6 September).
Bond said leveraging Tyson’s size by selling more products across all distribution channels was among the steps required to create long-term shareholder value.
“We’re going to leverage our scale to create long-term, sustainable shareholder value,” said Bond. “One of the ways we’re going to do that is by thinking across channels, across customers and across proteins.” Possible initiatives include selling some new foodservice products to club stores or marketing a product originally developed for school cafeterias to retailers.
Miquelon noted the steps the company has taken in recent months to return to profitability, including the implementation of approximately $200m in cost reductions and the consolidation of beef plants. Tyson believes that more than 90% of these annual savings will be fully delivered in the 2007 fiscal year.
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However, both Miquelon and Bond also acknowledged the importance of going beyond cost savings to grow the company’s top-line sales. “I’m proud of what we’ve done so far to right the ship, but there is much more we can do,” Bond said. “To thrive, not just survive, we must respond better and faster … and we will.”
In his presentation, Bond also spoke about the relationship between Tyson’s commodity and value-added food operations. “We see ourselves as a value-added food company with a commodity base, and we think this works to our advantage because we can internalise raw materials for our further-processed products,” Bond said. Some 70% of Tyson’s poultry production is in value-added products, such as chicken nuggets, breaded strips and hot wings.
Bond said that in an effort to remain at the forefront of product development for foodservice and other customers, Tyson is preparing to open a new research, development and training complex in early-2007 called “The Discovery Center”.
Tyson has also announced the appointment of Rob DeMartini as group vice president, consumer products. Formerly with The Gillette Company, DeMartini will oversee operations, marketing and sales for all divisions within Tyson’s consumer products business.