Tyson announced it was closing four plants on Monday. File Photo by Shawn Thew/EPA-EFE
Aug. 7 (UPI) — Tyson Foods announced on Monday that it will close four plants as it saw its chicken revenue drop 3{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in the third quarter, the company said in its quarterly earning statement.
Tyson said it will close its plants in North Little Rock, Ark.; Corydon, Ind.; Dexter, Mo.; and Noel, Mo.
Tyson’s CEO Donnie King said the closings show its “commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilization, and build on our strategy of making Tyson Foods stronger in the long-term.”
Sales of chicken products at one of the world’s biggest processors rose by 2.8{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in the second quarter, but average prices dropped by 5.5{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5}.
In March, Tyson announced that was closing two other chicken plants because of a drastic drop in revenue over the past year. Those plants were in Glen Allen, Va., and Van Buren, Ark., affecting the 1,661 employees who work at the two facilities.
Tyson said in its quarterly report that the new round of closures would lead to them shifting production to other facilities and would impact the locations over the two quarters.
“We continue to evaluate the financial statement impact of the closures for charges related to contract terminations, impairments, accelerated depreciation, severance and retention,” Tyson Foods said in a statement.
“Based on our preliminary analysis, we currently estimate total charges of $300 million to $400 million which will be recorded through the planned closure dates.”
Tyson said the U.S. Department of Agriculture projects chicken production will increase by about 3{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} in fiscal 2023 as compared to fiscal 2022. The company said it anticipates an adjusted operating margin of minus 1{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} to 1{dec8eed80f8408bfe0c8cb968907362b371b4140b1eb4f4e531a2b1c1a9556e5} for fiscal 2023.
“While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top-line growth and margin improvement,” King said. “I’m encouraged by the improvements we made this quarter, including our Tyson Core Business lines that continue to outpace our peers in volume growth.”
