The American meat giant Tyson Foods is closing 4 chicken segment processing facilities in the US. The closures are needed to optimise network asset utilisation further, Tyson Foods announced in its quarterly financial report.
The facilities are in Corydon, Indiana; Dexter, Missouri; Noel, Missouri; and North Little Rock, Arkansas. Tyson Foods expects to shift production to other facilities and cease operations at the impacted locations at the end of this year or the beginning of 2024.
“We continue to evaluate the financial statement impact of the closures for charges related to contract terminations, impairments, accelerated depreciation, severance and retention. Based on our preliminary analysis, we currently estimate total charges of US$300-400 million, which will be recorded through the planned closure dates,” the report says.
Tyson Foods suffered an operational loss of US$350 million in the second quarter of 2023, the third in its financial year. The company recorded a profit of US$1,033 a year earlier over that period. The chicken division recorded a quarterly loss of US$314 million, making it the worst-performing division of the company. Total turnover was US$13,140 million, a decrease of 3% year-on-year.
“While current market dynamics remain challenging, Tyson Foods is fully committed to our vision of delivering sustainable, top-line growth and margin improvement,” said Donnie King, president and CEO of Tyson Foods. “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.”
King added: “The difficult decision to close 4 chicken facilities in North Little Rock, Arkansas, Corydon, Indiana, Dexter, Missouri and Noel, Missouri, demonstrates our commitment to bold action and operational excellence as we drive performance, including lower costs and improving capacity utilisation, and build on our strategy of making Tyson Foods stronger in the long-term.”