Two years after the Indian Godrej group spun off its poultry business into a 49% joint venture with American meat producer and marketer Tyson Foods, Godrej Tyson has recorded a net profit in the half-year ended September 2010 as compared to a loss for the fiscal year 2009-10.
“From losses in the previous fiscal we are now firmly in the black. This is the result of Tyson bringing in a number of efficiencies which have helped enhance shelf life of processed chickens (sold under the Real Good chicken brand) and Yummiez, reducing wastage, reducing processing losses by finding markets within Asia for products which were previously discarded such as claws, and adding new institutional customers such as KFC and McDonald’s,” said S Varadaraj, executive vice-president, finance & systems, Godrej Agrovet.
“Since Godrej Agrovet was in the business of supplying poultry feed to farmers we thought we could forward integrate by buying back full grown chicks from farmers, processing and selling them in the market. But we lacked the food processing technology and domain expertise they bring,” added Varadaraj.
In the quarter ended September 2010, Godrej Tyson sales zoomed by 41.9%. Real Good chicken volumes improved by 16% and price realisation improved by 5.5%, Godrej recently told analysts. Yummiez volume improved by 69% and realisations rose by 6% the company said in an analyst’s presentation.
Godrej Tyson’s chief competitor in India is Venky’s.